NU Online News Service, Sept. 19, 10:59 a.m. EDT
Insurer Steadfast does not have a duty to defend AES Corp. in a climate-change case alleging that AES' emissions have contributed to rising sea levels threatening the village of Kivalina, Alaska.
AES was named in the case of Kivalina v. Exxon Mobil Corp., et al., and requested that its insurer, Steadfast, an indirect subsidiary of Zurich Financial Services, provide a defense and insurance coverage against claims that its emissions had contributed to rising sea levels in Kivalina.
This caused land-fast sea ice protecting the village's shoreline to form later or melt earlier in the annual cycle. It allegedly exposed the shoreline to storm surges, resulting in erosion of the shoreline and rendering the village uninhabitable, according to the opinion of Justice Bernard Goodwyn on Sept. 16.
The Virginia Supreme Court's ruling found that AES, which is based in Arlington, Va., paid premiums to Illinois-based Steadfast for commercial general liability (CGL) policies from 1996 to 2000 and 2003 to 2008.
According to the court document, Steadfast claimed it did not owe AES a defense or indemnity coverage for damage allegedly caused by AES' contribution to global warming because the complaint against AES did not allege “property damage” caused by an “occurrence”; that alleged injuries arose prior to the inception of Steadfast's coverage; and that claims alleged in the complaint fell within the scope of the pollution exclusion stated in AES' policies.
The parties subsequently filed cross-motions for summary judgment.
The court holds that the complaint does not allege an “occurrence” as the term is defined in the CGL policies, and thus, the allegations in the complaint are not covered under those policies, according to the document.
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