Paul C. Steck, Author at The Insurance & Reinsurance Report

June 30, 2015 Environmental

Texas Supreme Court Holds that EPA Proceedings Constitute “Suit”

In McGinnes Industrial Maintenance Corp., v. The Phoenix Ins. Co., the Texas Supreme Court answered a certified question from the Fifth Circuit on whether a U.S. Environmental Protection Agency proceeding against an alleged polluter constitutes a suit under an insurance policy, warranting defense coverage. In a 5-4 decision, the Texas court determined that the EPA proceedings constitute suits against and found that the insured could now pursue claims against the insurers for defense costs.

The policyholder sought a ruling allowing it to go after …

April 2, 2015 Environmental

Injuries Caused By a Gas Explosion Covered By Pollution Liability Policy

In Acuity, A Mut. Ins. Co. v. Chartis Specialty Ins. Co., 2015 WI 28, P52 (Wis. 2015), the Wisconsin Supreme Court has held that a pollution liability policy issued by Chartis Specialty Insurance Co., covered lawsuits alleging property damage and bodily injury caused by a natural gas line explosion. The policy, held by a construction company, was found to be implicated because natural gas is a pollutant and contaminant, the escape of which was a “pollution condition” within the meaning of the policy. The …

November 17, 2014 Environmental

Oregon Federal District Court Gives Insurer Partial Win in Superfund Case

In Siltronic Corp. v. Employers Ins. Co. of Wausau, No. 3:11-cv-1493, 2014 U.S. Dist. LEXIS 153275 (D. Or. Oct. 28, 2014), an Oregon federal court granted partial summary judgment for the insured Siltronic Corp. (Siltronic), finding the insurer Employers Insurance Company of Wausau (Wausau) had a duty to defend against claims related to the cleanup of a Superfund site. The district court, however, denied Wausau had a duty to pay any pre-tender defense costs.

The coverage dispute arose from one of seven policies issued …

November 4, 2014 Environmental

No Further Information Required: 10th Circuit Confirms Clear Pollution Exclusion and Rejects Insured’s Attempts to Introduce Extrinsic Evidence

This environmental coverage action involved a determination of the insurers’ obligations to reimburse the policyholder for its litigation costs arising from an action commenced by over 400 Chesapeake, Virginia landowners. The landowners alleged a golf course developer caused personal injury and property damage through the use of contaminated fly-ash material during the construction of a nearby golf course.

The policyholder was insured under seven commercial general liability policies that required the insurers to reimburse Headwaters for expenses associated with lawsuits that occurred during the policy …

October 23, 2014 Occurrence

Pennsylvania District Court Finds No Coverage for Faulty Workmanship

In State Farm Fire & Casualty Co. v. McDermott (E.D. Pa. Oct. 14, 2014), a Pennsylvania federal district court recognized the well-established rule in Pennsylvania that faulty workmanship resulting in construction defects is not caused by an “occurrence.” This coverage dispute arose out of work performed by McDermott at a residential housing development. After McDermott completed its work on windows and doors, the homeowners discovered water intrusion. They sued the developer, which, in turn, sued McDermott for negligence and breach of contract. McDermott sought coverage …

September 10, 2014 Environmental

Phase I/II Environmental Assessment Report Issued To Property Owner Held To Constitute A Claim For Environmental Losses Under A Claims-Made Policy

This environmental action involves a determination of coverage under a claims-made policy stemming from the investigation and clean-up of a site in Waterbury Connecticut. Specifically, Adelphia entered into a contract to sell its Waterbury property and engaged an environmental consultant to conduct an environmental audit of the site prior to the sale pursuant to the Connecticut Property Transfer Act. The Act prohibited transfer of an “establishment” without certifying that a parcel had been investigated for the potential discharge of hazardous waste and resultant remediation.

The …

August 29, 2014 Occurrence

Seventh Circuit Enforces Products-Completed Operations Hazard Exclusion in Faulty Workmanship Coverage Dispute

The Seventh Circuit, applying Illinois law, held that a Products-Completed Operations Hazard exclusion in a commercial general liability policy precluded coverage for a construction defect suit. The coverage dispute arose out of the alleged faulty workmanship by the developer-insured in connection with a condominium conversion project, which allegedly caused damage to the condominium owners’ personal property.

Following the construction of the condominiums, the condominium owners discovered water damage. The board of the condominiums ultimately sued the developer, alleging faulty workmanship with respect to the construction …

August 18, 2014 Environmental

Court Rejects Policyholder’s Products-Completed Operations Hazard Arguments In Attempt To Obtain Coverage For Environmental Claims

This environmental coverage action arises from soil and groundwater contamination at Visteon’s Indiana plant that migrated to the properties of neighboring landowners. Specifically, Visteon manufactured automotive climate control system parts at the facility continuously until 2007 and operated 13 degreasers, which primarily used Trichloroethylene (TCE) as a degreasing solvent. Multiple historical releases of TCE from the 1960s to 2000 and beyond resulted in a TCE groundwater plume that emanated from the site and volatile organic compounds, including TCE, were detected in the soil. Visteon was …

August 15, 2014 Environmental

District Court Rejects Pollution Exclusion In Worker Exposure Case

This environmental coverage action arose from a worker’s exposure to corrosive chemicals while cleaning a tank and involved, in pertinent part, application of the pollution exclusion. As background, the claimant’s employer specialized in cleaning mud tanks used in oil and gas drilling operations. The claimant was not informed by the policyholder, JCI, that the subject mud tank contained large quantities of caustic materials, and based on that representation, he entered the mud tank without proper safety equipment. As a result, the claimant was exposed to …

July 3, 2014 Environmental

Issue of Whether EPA Administrative Orders Pursuant To CERCLA Qualify As A “Suit” Certified To Texas Supreme Court

This environmental coverage action involved a dispute over whether the insurers had a duty to provide a defense to claims brought by the EPA in a CERCLA remediation action involving hazardous waste contained in three surface impoundments. The 5^th Circuit interposed a certified question to the Supreme Court of Texas whether the EPA’s PRP letters and unilateral administrative orders issued pursuant to CERCLA constitute a “suit” within the meaning of the commercial general liability (CGL) policies triggering a duty to defend.

The plaintiff policyholder …