The question of the month deals with pollution liability coverage and the associated costs of cleaning polluted sites. Insurers have attempted to deal with pollution claims by writing exclusions in liability policies, and indeed, insurance policies have been rewritten many times in attempts to deal with pollution claims and the judicial interpretations of the pollution exclusion. However, questions about coverage still exist today and the pollution exclusion is still subject to changing and various judicial interpretations.

For a discussion of the pollution exclusion and for a review of relevant court cases on the subject that will help the reader answer questions about coverage (or the lack thereof) for pollution claims, see the designated article in the Bulletins.

The court rulings discussed in the Dec Page cover several subjects.

An Ohio appeals court addresses the question of whether the insurer was obligated to provide a defense and indemnity to an additional insured. The appellant in this case was added as an additional insured on a general liability policy and when a claim was made against the insured and the additional insured, the issue of coverage for vicarious liability versus direct liability was what the court had to decide.

The loss of consignment sale proceeds and whether a garage policy covered that loss was the case before a court of appeals in Washington . The insured provided a vehicle to another party on consignment and after the vehicle was sold but before the insured could collect his money, the other party's bank froze its assets. The insured filed a claim based on theft coverage and the court had to decide if the garage policy applied to loss to a covered auto or to loss of money from the sale of that covered auto.

A defamation case from California is presented in the Dec Page, not for a discussion of insurance coverage, but for an offering of information that can be helpful if an insured were to get sued and seek insurance coverage under the personal and advertising injury liability section of the CGL form. The main issue here was whether a person can be sued for defamation if that person receives a defamatory e-mail over the internet, adds an introductory message preceding that defamatory language, and then hits the forward icon on the computer.

The economic loss doctrine is discussed by the Arizona Supreme Court in a case seen as one of first impression and statewide importance. The Court ruled on the doctrine in the context of a professional liability coverage claim.

Questions and Answers

The insured is a pest control business and has endorsement CG 24 25, limited fungi or bacteria coverage, attached to the CGL form. Does this endorsement cover the insured's exposure for the mold work he performs? See Fungi or Bacteria Coverage Question. The insured had a couch destroyed by water; a matching love seat was not damaged. How is the value of the loss determined, by ACV or some other way? See  Actual Cash Value for Couch and Sofa Set? An insured purchased a motorcycle two years ago with a custom paint job. The paint is now bubbling and the insured is making a damage claim. Is there coverage for the bubbling paint claim under the BAP? See BAP Coverage for Bubbling Paint. 

A fourteen-year-old boy was given permission by his friend to drive the friend's car even though the boy did not have a driver's license. The boy caused an accident. Is there coverage for the boy under his parents' PAP? See Unlicensed Minor Driver Covered for Damage He Causes? The insured suffered some stress cracks in the fiberglass beader at the upper corners over the windshield of his motor home. Does the wear and tear exclusion in the PAP prevent coverage the claim? See Wear and Tear Exclusion Applicable to Cracks in Fiberglass? With regard to 180 days time restriction to make a claim for replacement cost, does the insured have 180 days after appraisal is completed or 180 days from date of loss? See Replacement Cost Claims and Time Restrictions.

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Mold Update

The article updates the information on coverage, or lack thereof, for mold claims. The homeowners policy, the commercial property form, and current liability forms are reviewed for possible coverage for mold claims, and court cases addressing mold claim disputes are discussed. The article also provides an extensive list of sources that can be used by the reader for information on mold and its ramifications for the insurance industry. See Mold—An Overview.

Information Security Protection Policy

The Insurance Services Office (ISO) has developed an e-commerce program providing coverage for cyber risks. EC 00 10, the information security protection policy, addresses the risks of e-commerce in an increasingly hostile environment. Loss of electronic data, extortion threats, coverage for wrongful acts by the insured are all subject matters for this form. The coverages, exclusions, conditions, and definitions of EC 00 10 are discussed and analyzed. See Information Security Protection Policy.