Insurance Coverage for Climate Change Suits: The Battle Has Begun

When it comes to climate change litigation, the stakes are almost as high for insurance companies as they are for the defendants they insure. Insurers therefore have strong incentives to closely parse their policies and pursue every possible basis for denying coverage, while policyholders, of course, have the opposite incentives. Given the novelty of the underlying claims, complex coverage issues involved, and high stakes, it is expected that the resulting insurance coverage disputes will be lengthy and hard-fought.

Climate change litigation has been slowly heating up, but the expected coverage battles have not materialized, until now that is. In July 2008 Steadfast Insurance Company filed the first coverage suit challenging an insurer's obligations to provide coverage for climate change-related suits against its insured: Steadfast Insurance Co. v. The AES Corporation, No. 2008-858 (Va. Cir. Ct.).

This article provides background on the Steadfast dispute, as well as the underlying climate change suit. It then examines each of the three coverage issues raised in the Steadfast suit: (1) whether the claims arise out of an “occurrence,” (2) whether the claims are barred by the “loss in progress” doctrine, and (3) whether the pollution exclusion applies. The article predicts that the outcome of Steadfast will likely turn on the pollution exclusion defense, but that even with respect to that issue, the insurer faces an uphill battle.     

Issues in Coverage for Preexisting Pollution Conditions under Pollution Liability Insurance Policies

Pollution liability insurance policies provide coverage for claims and costs associated with pollution conditions that develop and commence during the policy period. Coverage under such policies for claims arising from pollution conditions that existed before the policy incepted, however, varies significantly under different policy forms. This article addresses the two principal means that insurers have utilized to limit the risks associated with preexisting pollution conditions under pollution policies: the known conditions exclusion and retroactive date provisions. The article explains that these provisions have received mixed treatment in the courts and are likely to continue to be a focus of future coverage litigation involving environmental impairment liability and pollution legal liability policies.     

Identifying Successor Corporations Liable under CERCLA and Pursuing Insurance Coverage for That Liability

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) imposes liability well beyond general corporate successor rules. A company can allocate liability to other Potentially Responsible Parties as more culpable, taking advantage of CERCLA's joint and several liability. Often a source of recovery must be teased from a complex corporate history somehow connected to the site. This article examines the basis for attributing environmental liability to entities within a corporate history, before addressing how even a bankrupt or dissolved target may still have insurance that can be tapped. Similarly, CERCLA's strict liability enables recovery from insurance with some connection to either the target's or the company's corporate history, notwithstanding insurers' non-assignment arguments.     

Insurance Coverage for Environmental Claims: Current Litigation Issues in the United States

The insurance industry introduced exclusions for environmental claims in the general commercial litigation policies in the early 1970s, and introduced even greater restrictions in the 1980s. Litigation over the two most common pollution exclusions has been robust and will likely continue to increase. This article first briefly reviews the history of insurance coverage for environmental claims in the United States, including the most common issues and how the courts have addressed them. The article then discusses the current issues and emerging trends in insurance coverage for environmental claims under the general commercial policies. Finally, there is a brief discussion on the growing market for insurance products that specifically cover (rather than exclude) environmental claims.     

Disclosure of Pollution Conditions during Underwriting: Coverage under Environmental Insurance Policies

Environmental insurance policies exclude undisclosed known pollution conditions. Litigation on the applicability of provisions defining known conditions suggests that policyholders: (1) should aim to avoid ambiguity; (2) carefully review applications before signing; (3) properly disclose facts; (4) clarify knowledge of confirmed releases; and (5) understand the need for and impact of further investigation based on consultant recommendations.     

保監會印發《保監局案件風險監管考核辨法（試行）》

2013年9月2日，保監局印發《保監局案件風險監管考核辨法（試行）》（以下簡稱《瓣法》），     

Insurance Market for Global Warming Heats Up: Old Products and New Policies Respond to Climate Change Risks

Climate change, characterized by higher surface and water temperatures, will likely lead to more frequent and severe storms, floods, rising sea levels, wildfires, and loss of a variety of species. The monetary loss attributable to these events could be enormous, resulting in a variety of first-party insurance claims and third-party lawsuits. The availability of insurance coverage to pay these claims will depend on the nature of weather-related losses and the particular policies in force. Insurers have also begun to develop products that pay to rebuild to “greener” standards after fortuitous losses, encourage lower carbon emissions, and provide incentives for the implementation of sustainable business and personal practices.     

Contested Insurance Coverage Issues: The Role of Extrinsic Evidence on the Duty to Defend

In the modern era, either the insurer or the policyholder seeks to introduce or limit the use of extrinsic evidence to resolve the duty to defend. This article examines the competing interests of the insurer and the policyholder where the use of extrinsic evidence is advanced to prove or disprove the duty to defend and how different state laws and courts treat the issue of contested coverage.     

New York's Lead Contaminated Tap Water: Litigation,Insurance Coverage,and Risk Management

Since the Flint water crisis almost two years ago, municipalities nationwide, including several towns and school systems within New York State, have discovered unacceptably high levels of lead in their drinking water. Given these discoveries, there is bound to be an increase in lawsuits and claims for insurance coverage–especially because the same public health concerns have already caused lead to be heavily litigated in the context of lead-based paint. This article examines the subject of lead-contaminated tap water and discusses issues pertinent to attorneys who may prosecute or defend a case involving it.