Carbon Monoxide Poisoning Covered?

Our insured had some friends in his garage for a get-together. Because it was winter, they had a space heater going. The end result was that our insured and one of his friends are dead. The family of the deceased friend is suing our insured's wife, and she herself is making a derivative claim for bodily injury. Our homeowners policy appears to exclude any coverage whatsoever. There is a Section I and II exclusion which precludes coverage for “bodily injury, personal injury, mental anguish or property damage … involving the presence, discharge, dispersal… of toxic chemicals, liquids or gases… or any substance which[is] or may be injurious to public health or the environment (herein called 'hazardous substances') into or upon land, the atmosphere or any water course or body of water…”

Illinois Subscriber