Indiana Appellate Court Again Expands Pollution Coverage
Charlie Kingdollar, Stamford

On November 9, 2000, an Indiana appellate court made several decisions that expand the scope of coverage for pollution claims under CGL policies (Allstate Ins. Co. et al. v. Dana Corp., 2000 Ind. App 2d Dist., Lexis 1833).

The case involved contamination at and emanating from numerous sites in several states owned by Dana Corporation, an automotive component manufacturer. Dana filed suit against its CGL and umbrella insurers with policies in force from 1977 to the present. Allstate's policies were in force from 1977 to 1982.

Several policy provisions and exclusions were interpreted by the appellate court. The court held that:

1) Policies with the 1973 ISO language rated on a "sales" basis (per $1,000 of receipts), rather than on a remuneration basis, do not contain aggregate limits for property damage;

2) The Owned Property exclusion does not apply to groundwater under an insured's land;

3) Insurers are jointly and severally liable for damages caused by a pollution loss and an insured is allowed to recover "all sums" for damages arising out of an occurrence taking place within the policy period including damages the occurred after the policy expired;

4) Pollution coverage is afforded under the Personal Injury provision of policies even when the language used does not include "wrongful entry" language as the court determined the phrase "invasion of the right of privacy" may be understood to include damage to the property of others and is therefore ambiguous; and

5) The continuous presence of contaminants in soil or groundwater is enough to trigger both the property damage and personal injury policy provisions over multiple policy years.

Previous rulings by Indiana's high court ruled that both the absolute pollution exclusion and the sudden and accidental pollution exclusion are ambiguous.

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