Q
We recently had a claim where a covered auto (a fuel tanker-trailer) was damaged by vandals when they ran a piece of mobile equipment into the tanker. A damaged valve allowed several thousand gallons of diesel fuel to spill, which had to be cleaned up.
ISO's commercial auto policy CA 00 01 (12 90 edition) section II states the company will pay “covered pollution cost or expense” under certain circumstances. Coverage for bodily injury or property damage for release of pollutants being transported or stored in or upon the covered auto is excluded; however, an exception to the exclusion states there is coverage for “pollutants” needed for the normal or mechanical functioning of the covered auto, if the “pollutants” are released directly from an auto part designed by its manufacturer to hold or store such “pollutants.”
It is this exception that we think gives the potential for coverage. The common person would think the normal mechanical function of the tanker is to store fuel, and it is specifically designed by its manufacturer to hold, store, and dispose of such fuel.
Iowa Subscriber
A
The operative word that saves the exception to the pollution exclusion of the business auto policy from applying to the kind of loss you describe is, we believe, “normal.” The exception to the exclusion refers to pollutants “that are needed for or result from the normal…mechanical function of the covered auto.” The leakage that occurs after the valve has been damaged by vandalism does not equate with the normal mechanical functioning of the tanker.
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