(Article from Insurance Law Alert, November 2017)
For more information, please visit the Insurance Law Alert Resource Center.
Ruling on a matter of first impression under Missouri law, the Missouri Supreme Court ruled that a pollution exclusion bars coverage for claims alleging injury caused by toxic emissions of lead, arsenic and other harmful substances.
Doe Run Res. Corp. v. Am. Guarantee & Liab. Ins., 2017 WL 5078078 (Mo. Oct. 31, 2017). Reversing a lower court decision, the Missouri Supreme Court held that the exclusion was unambiguous, notwithstanding its failure to define “contaminant” or “irritant” or to list specific contaminants. Significantly, the court distinguished
Hocker Oil Co. v. Barker-Phillips-Jackson, Inc., 997 S.W.2d 510 (Mo. App. 1999), which deemed a pollution exclusion ambiguous as to gasoline-related damage based on its failure to identify gasoline as a pollutant. The court explained that the finding of ambiguity in
Hocker was based on the fact that the insured party was a gasoline company that considered gasoline to be a product rather than a pollutant. Here, however, the bodily injury claims arose out of toxic substances released into the atmosphere rather than out of exposure to Doe Run’s commercial lead products. Although some of the toxins were lead particulates, the court emphasized the distinction between commercially valuable lead products and the harmful particulate lead toxins in the atmosphere. The court stated: “That its toxic or hazardous materials are valuable products if Doe Run properly contains them does not make them any less ‘pollutants’ when they are abandoned and released into the environment.”