A new Appeals Court decision (litigated on behalf of the insureds by Anderson & Kreiger) has restored the usefulness of pollution legal liability (PLL) policies, overturning a Superior Court decision and holding that an insurer cannot exclude coverage under a “known conditions exclusion” without proving that newly discovered contamination is connected to the contamination that the insured knew about. Market Forge Industries, Inc. v. Indian Harbor Insurance Co. (August 29, 2014).
Because insurers have succeeded in excluding most pollution claims from coverage under traditional liability policies with broad pollution exclusions, insureds are turning to newer types of policies intended to cover pollution, such as PLL policies. Under these policies, it is important to identify contamination that the insureds know about at the policy inception; the policies, though very expensive, are not intended to cover known contamination. Because these policies are often purchased for old commercial or industrial sites, the insureds may suspect contamination or even know of some. With this decision, insureds can take some comfort that their knowledge of contamination on one part of a property won’t foreclose coverage for contamination found elsewhere. Continue reading