The insured is a hotel and spa. The claimants were in the exercise room, which is right next to the chlorine pumps for the pool. Three guests had just started working out in the exercise room when they became ill and subsequently were taken to the hospital. The exact cause was unknown; however, the fire marshal stated he smelled a strong chlorine odor.

The insured has a CG 00 01 12 07, which contains a standard exclusion for pollution.

The insured also has endorsement CG 21 65 12 04, Total Pollution Exclusion with A Building Heating, Cooling and Dehumidifying Equipment Exception and a Hostile Fire Exception.

We believe chlorine fumes meet the definition of “pollutant” and should be excluded as per the language of the CG 21 65 12 04 endorsement. Under this exclusion, bodily injury, which would not have occurred in whole or in part but for the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants at any time would be excluded. However, this exclusion does not apply should the release be a result of smoke, fumes, vapor, or soot produced by or originating from equipment that is used to heat, cool, or dehumidify the building. It does not appear that the fumes came from the heating system.

We recommend coverage be disclaimed since the injuries appear are a result of inhalation of chlorine fumes. Do you agree?

New Jersey Subscriber

We agree that there is no coverage for the bodily injury caused by chlorine gas fumes from a swimming pool. The pollution exclusions on the policy and endorsement state that pollutants include those in vaporous form. The pertinent exception states that it does not reach to “'bodily injury' if sustained within a building which is or was at any time owned or occupied by, or rented or loaned  to, any insured and caused by smoke, fumes, vapor or soot produced by or originating from equipment that is used to heat, cool or dehumidify the building, or equipment that is used to heat water for personal use, by the building's occupants or their guests.” However, a swimming pool is not equipment that falls within this exception of being used to heat, cool, or dehumidify a building or to heat water for personal use.

Courts have come down on both sides of the exclusion in similar situations. An example in support of the “no coverage” stance is the reasoning found in Quadrant Corp. v. American States Ins. Co., 110 P.3d 733 (Wash. 2005.) In that case the court disagreed with a ruling by another court in a similar situation:

A tenant in an apartment building was overcome by fumes and became ill after a restoration company applied sealant to a nearby deck. The tenant sued the restoration company and the owners of the apartment building. Both the restoration company and the building owners settled and the owners now claim that their business liability insurance should cover the loss.

The business liability policies at issue here both contain absolute pollution exclusion clauses, which the insurers now argue apply to exclude coverage for the tenant's claim. The building owners contend that after this court's decision in Kent Farms, Inc. v. Zurich Insurance Co., 140 Wash.2d 396, 402, 998 P.2d 292 (2000), the pollution exclusion cannot be applied to exclude occurrences that are not “traditional environmental harms.” The owners also assert that if it is applied as the insurers suggest, the pollution exclusion would render the policy illusory with regard to the restoration company.

We hold that the plain language of the absolute pollution exclusion clause encompasses the injuries at issue here and therefore the tenant's claim is excluded from coverage. We find that the Kent Farms case is distinguishable on its facts and instead we adopt the reasoning of Cook v. Evanson, 83 Wash. App. 149, 920 P.2d 1223 (1996), a case similar to this one in that it involved injuries that resulted from toxic fumes. Furthermore, we conclude that the pollution exclusion clause does not render the policies illusory with respect to the building owners because the insurance policy will still cover a variety of claims, including slip and fall accidents, despite the pollution exclusion.

Kent Farms, however, ended with the opposite result, that the pollution exclusion applied only to environmental claims.

In summary, while we agree with your assessment, you should be aware that a court may not support that decision. There are many variables that may result in a ruling either in support of or opposition to coverage.