The U.S. Supreme Court ruling yesterday bolstering the right to sue the government for costs involved in a voluntary cleanup of hazardous material should not have much impact on insurers, said an industry expert.
The court strengthened a landmark anti-pollution program yesterday, enabling companies to recover some costs when they voluntarily clean up hazardous material.
Ken Ayers, managing director of Aon Environmental Services, said that most policies currently exclude clean-up coverage for known conditions at sites on the National Priorities List, and non-NPL locations as well.
In a unanimous ruling, the justices said the federal Superfund law allows lawsuits to recover costs incurred in voluntary cleanups. The Bush administration had argued otherwise.
Atlantic Research Corp., an Arkansas firm, had voluntarily cleaned up pollution after rocket propellant leaked onto its site and then sued the government in an effort to share the costs. The Bush administration opposed any sharing.
The Justice Department contended the companies themselves must be sued by regulators under the Superfund law or be targeted with government enforcement action before they can sue others.
Mr. Ayers noted that coverage for voluntary or non-voluntary cleanup actions by the party doing the cleanup at the site is normally provided under a cost cap policy.
“Since cost caps are not liability policies and are underwritten based on a remedial action plan provided by the party performing the cleanup, they would be independent of this ruling and not subject to subrogation or other claims for contribution,” Mr. Ayers said.
Atlantic Research had contracted with the U.S. government to retrofit rocket motors, work that ultimately led to the propellant seeping into soil and groundwater.
Corporations, state regulators and environmental groups said the Bush administration's legal stance is a bid to insulate the government from anti-pollution lawsuits.
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