Annotated Table of Contents

See each section below and the powerful information included.

This Annotated Table of Contents provides a brief description of the material included in Pollution Coverage Issues. For each issue tracked, PCI provides a written explanation, an interactive hyperlinked map showing how each state is ruling on the issue, and a series of charts listing cases from each state and summarizing the holding of each case.

CGL Coverage Issues

PCI currently tracks 11 pollution coverage issues arising under the commercial general liability (CGL) policy.

Issue 1: Definition of "Suit"

This discussion explains how courts are interpreting the word "suit" in the 1973 CGL coverage form for purposes of determining whether the insurer must provide a defense when an environmental enforcement agency contacts the insured informally to request information or mandate a cleanup.

Issue 2: Definition of "Damages"

This discussion explains how courts interpret the word "damages" in a 1973 CGL coverage form for purposes of determining whether coverage applies to liability for pollution response costs under a federal or state environmental statute. At first, there were a few courts reading that word as meaning "money damages" that would have been awarded in a historic court of law. But now most courts reject a reading based on the historic distinction between law and equity.

Issue 3: Coverage Triggers

This discussion explains the various rules states employ to determine how many pre-discovery liability policies written on the 1973 CGL coverage form are triggered by long-tail pollution losses. Theories discussed include manifestation, exposure, injury-in-fact, and continuous trigger.

Issue 4: Known Loss Doctrine

This discussion explains the known loss doctrine and its close cousin, the loss-in-progress doctrine, which are derived from the principle of fortuity. It shows how liability losses may not be insurable if they already occurred, or if they are so far along in the process such that they lack the risk of uncertainty that is a prerequisite of insurance.

Issue 5: Allocation

This section of PCI contains several discussions explaining the rules courts in different states use to allocate a long-tail pollution loss among successively triggered liability policies written on the 1973 CGL coverage form. Theories discussed include all-sums, time-on-the-risk, and time plus limits (the New Jersey approach), as well as a proposed contractual allocation scheme.

Issue 6: "Sudden and Accidental" Exception

This discussion explains how courts apply the "sudden and accidental" exception to the pollution exclusion in the 1973 CGL coverage form.

Issue 7: "Owned Property" Exclusion

This discussion examines six common-law exceptions courts developed to avoid the application of the "owned property" exclusion in the 1973 CGL coverage form.

Issue 8: Post-1986 Pollution Exclusions

This discussion explains that, when courts apply the post-1986 pollution exclusion, they are impliedly examining the "pollution risk profile" of the claim as demonstrated by its facts. If the pollution risk profile is similar enough to "traditional environmental pollution," courts will apply the literal terms of the post-1986 exclusion to deny the claim. But if the pollution risk profile is not similar to "traditional environmental pollution," courts say that the insured has a reasonable expectation of coverage under the circumstances, and that applying the post-1986 exclusion would be unreasonable or absurd.

Issue 9: Pollution as "Personal Injury"

This discussion explains the controversy over whether a pollution claim stated in terms of common law trespass or nuisance is covered as "personal injury" under pre-1996 CGL polices. How courts rule on that issue depends on their reaction to historic flaws in the structure of the pollution exclusion and in the wording of the definition of "personal injury" itself.

Issue 10: Coverage for Successor Liability

This discussion explains the controversy over whether a policyholder may assign its rights under an occurrence-based policy for a long-tail claim that has been "incurred but not reported" (IBNR) by entering an asset purchase agreement transferring its property to a corporate successor, even though the insurer did not consent to the transaction.

Issue 11: Lost Policies

This discussion explains some of the issues that arise when a policyholder attempts to prove coverage under an old insurance policy that has been lost or destroyed.

IRMI publication date for this page: September 2010