Is My Drywall Chinese? - HB Litigation Conferences

unwanted. The flooring material (styrene monomer resin) brought
upon the premises by [the policyholder] was wanted. It was not
impure. When [the policyholder] purchased its CGL insurance, it
understood “pollutant” in the same way that the Oxford English
Dictionary defines “pollutant,” as an unwanted impurity, not as the
raw materials which [the policyholder] purchased to do its job. 60
The Tufco court considered an insurance industry publication explaining a polluter’s
exclusion entitled “Commercial Liability Insurance, Vol. 1, Section V, Annotated CGL Policy
(1985).” 61 After careful consideration, the court found no indication that, in revising the
polluter’s exclusion, the insurance industry intended to extend the clause to preclude coverage
for non-environmental damage. 62 Instead, the court found the clause’s continued use of
environmental terms of art such as “discharge” and “release” evidenced the insurance industry’s
intent to exclude coverage only for environmental pollution. The Tufco court thus refused to
expand the exclusion’s scope by judicial fiat: “[T]his Court agrees with the . . . historical
limitation that the pollution exclusion clause does not apply to non-environmental damage.” 63
Insurance Company=s Failure to Give Policyholder Notice of Reduced Coverage
Courts also may refuse to apply pollution exclusions broadly when the insurance
company has not given adequate notice of a reduction in coverage. For example, in Horace
Mann Insurance Co. v. Jackson, 64 a Minnesota appellate court affirmed the trial court’s
judgment upholding insurance coverage for the policyholder’s liability for lead-paint injury.
The
policyholder there owned rental property and was sued for injuries allegedly caused by the
60
Id. at 698.
61
Id. at 699.
62
Id. at 699-700.
63
Id. at 699.
64
No. CX-97-175, 1997 WL 537022 (Minn. Ct. App. Sept. 2, 1997).
- 21 -