La. Court Bars Pollution Exclusion to Deny Coverage in Bodily Injury Case

May 16, 2007

A Louisiana state judge has ruled that an insurance company cannot use the so-called “absolute pollution exclusion” to deny its corporate policyholder coverage for claims alleging that bodily injury was caused by workplace exposure to a hazardous substance, according to one of the law firms representing the plaintiff.

The law firm of Anderson Kill & Olick, said that Judge Wilfred Carter of the Fourteenth Judicial District Court, Calcasieu Parish, struck the insurance companies’ pollution exclusion defense as a basis to deny coverage for ConocoPhillips’s claims arising from underlying lawsuits, in which contractors’ employees allege exposure to ethylene dichloride (EDC) while working at and near ConocoPhillips’s docks facility in Westlake, La. (In Re: EDC Contractor Insurance Litigation, Docket No. 98-1984, April 18, 2007)

According to Anderson Kill & Olick, ConocoPhillips seeks coverage as an additional insured under the insurance policies of the contractors whose workers allege they were injured from exposure to EDC. ConocoPhillips was represented by John N. Ellison and Nicholas M. Insua of Anderson Kill & Olick, P.C., G. Andrew Veazey of Huval, Veazey, Felder & Aertker, and Raleigh Newman.

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, but were claims alleging bodily injury arising from negligent exposure in the workplace to a purportedly hazardous substance. The substance, EDC is, however, a useful product, and in this instance, it was in the stream of commerce as an essential ingredient to be used in the production of vinyl chloride.

The plaintiffs argue that in the context of a negligent workplace exposure claims alleging bodily injury from exposure to a product in the stream of commerce, the pollution exclusion should not apply. ConocoPhillips was not seeking clean-up costs for any environmental impacts, nor was it seeking any coverage for alleged bodily injury or property damage arising from the original discharge of EDC.

Source: Anderson Kill & Olick,

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