Claims Magazine Explores the "Global Warming" Claim.

Claims Magazine this month features a well-written cover story by attorney Suzanne Badawi entitled The “Global Warming” Insurance Claim.

The article explores the rise of regulations, restrictions, and lawsuits regarding environmental issues that businesses face. It looks at whether "such claims are excluded under a typical “absolute pollution exclusion” found in commercial general liability (CGL) policies." This is critical information for business owners. Lawsuits regarding environmental issues are expensive to defend. The business owner will want to submit the claim to their insurer and will want the insurer to assign a lawyer to defend the claim and have the insurer indemnify any judgment.

The absolute pollution exclusion is drafted to exclude coverage for pollution related claims. It is a common exclusion in CGL policies and, like many exclusions, has been interpreted differently from one court to the next and from one state to the next.

Ms. Badawi's article looks at differing court's interpretations of the exclusion in order to examine the issue of greenhouse gasses and how those gasses would be treated by examining courts. What struck me was the analysis of a 2007 U.S. Supreme Court case, Massachusetts v. Environmental Protection Agency, wherein the Court concluded that carbon dioxide was probably a pollutant and that the EPA was probably required to promulgate regulations regarding carbon dioxide. Because the EPA will likely be forced to regulate the gas as a pollutant, insurers will argue claims are excluded under the pollution exclusion.

The author concludes that an era of "Global Warming" claims lies in the future and whether insurance coverage exists or is excluded will be fought in the courts in the years to come.