The New York Changes In Business Auto 8-E-3967 Endorsement deletes the Pollution Exclusion (11) on the CA 00 01 03 10 Business Auto Coverage Form. However, the Business Auto Coverage Form defines "Covered Pollution Cost or Expense" as to not include cost or expenses resulting from pollution caused by property being transported by the insured. So, my question is:
If an insured is hauling pollutants, and the vehicle overturns or catches fire releasing the pollutants being transported, would the resulting clean-up costs be covered, or is the Covered Pollution Cost or Expense limited to the release of fuels, lubricants, fluids etc. needed for the operation of the insured vehicle?
New York Subscriber
Let's first look at the auto form without the endorsement. In that form, pollution is excluded in its entirety, and elsewhere the care, custody or control exclusion in the auto form excludes coverage for covered pollution cost or expense involving property owned or transported by or is in control of the insured. However, there is an exception within the care, custody or control exclusion for release of pollutants that are needed for the normal functioning of the auto, such as gas, diesel and hydraulic fluids.
The endorsement deletes the pollution exclusion in its entirety, which in absence of any other provision gives back coverage for bodily injury or property damage for released pollution if it is in any property being transported.
The pollution cost or expense is separate from this pollution, and per the endorsement, its meaning is:
1. The "covered pollution cost or expense" definition in all coverage forms, except the Business Auto Physical Damage Coverage Form, is replaced by the following:
"Covered pollution cost or expense" means any cost or expense arising out of: a. Any request, demand, order or statutory or regulatory requirement; or b. Any claim or "suit" by or on behalf of a governmental authority demanding; that the "insured" or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants".
With this revised definition, the care, custody or control exclusion will still apply and this makes it clear that cleanup costs are not covered if it involves property in the insured's control. The revised definition also removes the coverage exception that is in the auto form for release of pollutants that are needed for the normal functioning of the auto. The endorsement is effectively excluding any pollution cleanup the insured is required to address from any source.
So in essence, the pollution cleanup required due to the accident is not covered, but any bodily injury or property damage from pollution, other than cleanup costs, is covered.