A Louisiana judge has ruled that an insurer cannot use insurance policy pollution exclusion language to deny coverage for claims alleging workplace exposure to a hazardous substance caused bodily injury.

Judge Wilfred Carter of the 14th District Court, Calcasieu Parish, in Lake Charles, La., rejected the insurance companies' pollution exclusion defense as a basis to deny coverage.

The case involves ConocoPhillips's claims arising from underlying lawsuits against it, which addressed alleged injuries suffered by contractors' employees due to exposure to ethylene dichloride (EDC) while working at and near ConocoPhillips's docks facility in Westlake, La.

In the insurance coverage lawsuit, ConocoPhillips is seeking coverage as an additional insured under the insurance policies of the contractors whose workers allege to have been injured from exposure to EDC.

New York-based attorney John Ellison, with Anderson Kill & Olick, who represented ConocoPhillips, said that across the country, states have been pretty much evenly divided on whether the pollution exclusion can be used in cases such as this.

In its motion, ConocoPhillips argued that the so-called "absolute" and "total" pollution exclusions contained in the insurance policies at issue did not bar coverage for the underlying claims because those claims did not arise from traditional environmental pollution.

Rather, they were claims alleging bodily injury arising from negligent exposure in the workplace to a purportedly hazardous substance.

The substance, EDC, is a useful product, however, and in this instance, it was present due to the stream of commerce as an essential ingredient to be used in the production of vinyl chloride, Mr. Ellison said.

According to Mr. Ellison's firm, the insurance firms involved in the case are: National Union Fire Insurance Company of Pittsburgh, Pa.; National Union Fire Insurance Company of Louisiana; American International Surplus Line Insurance Company; Lexington Insurance Company; Commerce & Industry Insurance Company; American Indemnity Company; Colonia Insurance Company; United National Insurance Company; Columbia Mutual Insurance Company; Continental Casualty Company; Continental Insurance Company and Scottsdale Insurance Company

Lawyers for the defendants have indicated they will take the case to the Louisiana Court of Appeals.

Special Reports /

La. Court Limits Pollution Exclusion

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