Pollution is a rising concern in insurance, and standard policies don’t provide much—if any—coverage. This article highlights some precedent-setting pollution cases that have come through Nebraska.
Starting in 1996, there have been six court cases involving pollution. These cases have created case law and have established precedents for interpreting insurance policies’ pollution exclusions. Below are a few noteworthy cases:
1996 Kruger Commodities, Inc. v. U.S. Fid. & Guar. Co.
The court set a precedent for the interpretation of the pollution exclusion: Neighbors of Kruger’s meat processing plant filed a complaint for the foul odors the resulted from the cooking oil and animal carcass processing. The courts ruled that Kruger did not have coverage for damages under the insurance policy, and they also established the precedent of chemicals being considered a pollutant. Thus the processing of the carcasses qualified as a ‘waste’ and was excluded as a pollutant. This left Kruger without any insurance coverage.
2009 Harleysville Ins. Group v. Omaha Gas Appliance Co.
The court decided that there is no coverage for carbon monoxide poisoning because of the pollution exclusion: An HVAC contractor had incorrectly repaired a gas boiler in a home, resulting in it emitting carbon monoxide. The release of carbon monoxide killed the residents and the HVAC contractor was left without any insurance coverage because carbon monoxide was deemed to be a pollutant.
2014 State Farm Fire & Cas. Co. v. Dantzler
The court decided that there is no coverage for lead poisoning, even from paint chips, because of the pollution exclusion: The owner of a rental property was sued by the tenant for exposing the tenant’s son to high levels of lead, found in paint chips. The property owner was left without any insurance coverage because paint chippings were deemed to be a pollutant.
- These are only a few examples of disputes that made it to the Nebraska courts—there are other public cases on the pollution exclusion.
- In each of these cases, the policyholder is asking the court to interpret the insurance policy in their favor, and in each case, the pollution exclusion is upheld. This is true for the cases that weren’t listed here as well.
- When the pollution exclusion is applied, the insurance carrier does not have to provide any legal defense or reimburse you for legal defense costs.
- Though chemical fumes, carbon monoxide, and lead poisoning are the cases discussed, the pollutant exclusion found in every standard policy has a very broad scope. These court cases are ‘grey-areas’, and even then the pollution exclusion has been applied in each.