One climate-change related threat insurers say is worth watching—and losing some sleep about: Class-action suits against carbon-based energy companies, accusing them of causing global warming and therefore being liable for the resulting damages.
Perhaps the most famous court case on this issue is Kivalina vs. ExxonMobil, et. al., which pitted a small Alaskan fishing village with 390 residents against two dozen of the country’s largest oil and gas companies.
The plaintiffs, who filed suit in 2008, sought up to $400 million in damages, based on the federal common law of public nuisance. They argued that the carbon emitted by the defendants caused the melting of the sea ice that historically had protected the village against fall and winter waves.
The case was dismissed by a U.S. district court, and a subsequent appeal was denied by the Ninth Circuit.
But insurers expect many more of these massive tort claims to be filed—and to seek recovery under Commercial General Liability, Directors & Officers coverage and Professional Liability policies.
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