Federal or state court? How will attribution science impact climate litigation?
The questions aren’t the only ones of interest to insurers and reinsurers wanting to understand the potential for mass climate liability claims in the years ahead. Another key question: Do liability insurance policies cover climate change litigation defendants?
In September 2011, the Virginia Supreme Court ruled that Steadfast Insurance Co. had no duty to defend and indemnify its insured, energy company AES Corp., for claims arising from a global warming lawsuit under a commercial general liability coverage policy.
Praedicat General Counsel Stephen Jones explained that AES was one of the defendants in an early climate change suit, Kivalina v. ExxonMobil, filed in 2008 by Native Alaskans whose village usually protected by sea ice had been subjected to flooding during winter storms now that the sea ice had melted. The U.S. Army Corps of Engineers determined that the entire village of Kivalina needed to be relocated due to the effects of climate change.
The insurance coverage case, he said, hinged on the definition of occurrence in the CGL, which would include an accident but not an intentional act. The Virginia court held that because climate change harms, and specifically the harms alleged in the Kivalina complaint were “a natural or probable consequence of greenhouse gas emissions,” it would not fall under the occurrence definition. Instead, it would be considered an intentional act, Jones explained.
“This is actually the only court thus far to find that there’s foreseeability—that the harm is not too remote,” he said, suggesting this might be an anomaly. “When the Virginia Supreme Court denied coverage, there were legal commentators that basically said that “under this definition of occurrence, CGL policies wouldn’t cover any negligence actions at all,” he said.
“I’m not sure that that result will be repeated in other jurisdictions, although I assume that there will be further coverage disputes and some policies will cover and some policies won’t,” he concluded.
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