Pollution Exclusion Application

March 18, 2013

The insured was hired to install a tracking system at a cheese processing facility that would pull two large mixing blades in a stainless steel vat. During the installation of the track, the insured left metal shavings where he had drilled holes into the steel frame that is above the vat. As a result, the metal shavings mixed into the cheese and the claimant has a loss in his cheese products of $200,000.

The policy defines a pollutant as any solid, liquid, gaseous, thermal, electrical emission (visible or invisible) or sound emission pollutant irritant or contaminant. So, does the pollution exclusion apply in this instance?

Ohio Subscriber

The pollution exclusion is not applicable. The metal shavings certainly can be considered a pollutant but you have to read the entire pollution exclusion to see if it is applicable. There are 5 parts to the exclusion: the escape or release of pollutants at or from any premises owned or occupied by any insured; the release of pollutants at or from any premises used for the handling or disposal of waste; escape or release of pollutants transported or handled as waste; release or escape of pollutants at or from any premises on which the insured is working if the pollutants are brought on or to the premises by the insured; and escape or release of pollutants at or from any premises on which the insured is working if the operations there are to test for or clean up pollutants.

In this instance, none of these parts describe what happened here. The work of the insured caused property damage to another's property and that is what the CGL form is meant to cover.

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