NU Online News Service, Sept. 19, 10:59 a.m.EDT

Insurer Steadfast does not have a duty to defend AES Corp. in aclimate-change case alleging that AES' emissions have contributedto 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 indirectsubsidiary of Zurich Financial Services, provide a defense andinsurance coverage against claims that its emissions hadcontributed to rising sea levels in Kivalina.

This caused land-fast sea ice protecting the village's shorelineto form later or melt earlier in the annual cycle. It allegedlyexposed the shoreline to storm surges, resulting in erosion of theshoreline and rendering the village uninhabitable, according to theopinion of Justice Bernard Goodwyn on Sept. 16.

The Virginia Supreme Court's ruling found that AES, which isbased in Arlington, Va., paid premiums to Illinois-based Steadfastfor commercial general liability (CGL) policies from 1996 to 2000and 2003 to 2008.

According to the court document, Steadfast claimed it did notowe AES a defense or indemnity coverage for damage allegedly causedby AES' contribution to global warming because the complaintagainst AES did not allege “property damage” caused by an“occurrence”; that alleged injuries arose prior to the inception ofSteadfast's coverage; and that claims alleged in the complaint fellwithin the scope of the pollution exclusion stated in AES'policies.

The parties subsequently filed cross-motions for summaryjudgment.

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 thosepolicies, according to the document.