McCarter & English, LLP on NGM Insurance Co., et al. v. Carolina's Power Wash & Painting LLC, et al. and the Absolute Pollution Exclusion

McCarter & English, LLP on NGM Insurance Co., et al. v. Carolina's Power Wash & Painting LLC, et al. and the Absolute Pollution Exclusion

   By Louis A. Chiafullo, Partner, McCarter & English, LLP

In a recent decision from the United States District Court for the District of South Carolina, the “absolute pollution exclusion” upon which insurers often rely to deny coverage was dealt another blow when the court held that it was unclear whether the exclusion unambiguously applied to paint fumes generated as a result of the insured’s painting business.  NGM Insurance Co., et al. v. Carolina’s Power Wash & Painting LLC, et al., No. 08-3378, 2010 U.S. Dist. LEXIS 2362 (D. S.C. January 13, 2010).  The court determined, therefore, that the insurer could not rely on the absolute pollution exclusion to deny coverage for the underlying personal injury suit.

 

The court was reluctant to adopt an interpretation of the absolute pollution exclusion that would “infinitely enlarge the scope of the term ‘pollutants.’”  Further, the court was unwilling to apply the exclusion -- meant in large measure to exclude coverage for “traditional” environmental pollution -- to paint or solvent fumes that drift a short distance from where they are being used and allegedly caused inhalation injuries to a bystander.

 

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Louis A. Chiafullo, Esq. is a partner in the Insurance Coverage Group at McCarter & English, LLP, and represents policyholders in a variety of insurance coverage actions.