Recent US Court of Appeals Cases Impact Analysis and Application of Pollution Exclusion Terms

Two separate United States Court of Appeals Cases--one held in the Fifth Circuit, the other in the Eighth Circuit-- resulted in new implications on how pollution exclusion terms in insurance policies are analyzed and applied. The Eighth Circuit case, Travelers Property Casualty Company of America v. Klick, No. 16-4000 (August 14, 2017), ruled that the insurance company was not liable to pay for injuries sustained to Christopher Klick from exposure to carbon monoxide aboard a friend’s fishing vessel because of the pollution exclusion clause in the insurer’s agreement with the boat dealer who sold the vessel to Klick’s friend, Lonnie Norberg, who lost his life as a result of the same carbon monoxide exposure incident that injured Klick. The exclusion stated that the insurance policy did not cover injuries sustained from the “release, dispersal, or migration of certain pollutants.”

In the Fifth Circuit case, Longhorn Gasket & Supply Company v. Trinity Lloyd’s Insurance Company v. United States Fire Insurance Company, Case No. 15-41625 (August 18, 2017), which regarded which insurer was responsible for remaining asbestos exposure claims against the insured company, the Court of Appeals vacated the previous ruling of the U.S. District Court for the Eastern District of Texas, USDC No. 2:07-CV-399, in favor of the primary insurer, Trinity Lloyd’s Insurance Company. This decision came after determining that asbestos was, in fact, a pollutant and therefore fell under United States Fire Insurance Company’s pollution exclusion clause.

To learn more about these cases and updates regarding pollution exclusion in insurance policies, click here.