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BT Policyholder Protection Blog
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06 Jun 2016 Can a Government Agency Information Demand Trigger a Liability Insurer’s Duty to Defend?

Can a demand from a state agency trigger insurance coverage? A recent decision by the U.S. Court of Appeals for the Ninth Circuit says “yes.” Many, if not most, jurisdictions now recognize that a demand from the Environmental Protection Agency (EPA) or a state agency to investigate and remediate contamination is the functional equivalent of a suit, which triggers a liability insurer’s duty to defend the recipient of the demand. The logic is that a communication from a governmental agency that includes a coercive remediation demand under an environmental statute, with the threat of fines or penalties for non-compliance, sufficiently bears the hallmarks of a traditional court lawsuit that there is no functional distinction between the two. Moreover, public policy dictates that a policyholder need…

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28 Aug 2015 Louisiana Federal Court Finds in Favor of Coverage for Work Required by Clean Air Act Consent Decree

A federal court in Louisiana recently interpreted the coverage under a Pollution Legal Liability (PLL) policy and found that certain costs required by a Consent Decree under the Clean Air Act constituted “remediation costs” covered by the PLL policy. Louisiana Generating LLC v. The Illinois Union Insurance Company, et al. Case 3:10-cv-0056. On Aug. 5, 2015, the United States District Court for the Middle District of Louisiana granted Louisiana Generating LLC’s motion for summary judgment against its insurer, Illinois Union Insurance Company, finding in favor of coverage for the installation of pollution controls and performance of mitigation projects required under the Consent Decree.   The Consent Decree resolved a prior suit in which EPA and the Louisiana Department of Environmental Quality sued Louisiana Generating LLC…

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