Insurer seeks to avoid climate change claim coverage obligations
Sometimes great storms announce themselves with a simple breeze and the same can be said about litigation that is likely to ensue between corporate policyholders and insurers as they begin to grapple with difficult insurance coverage issues surrounding climate change. A recent case filed in Virginia by Steadfast Insurance Company seeking to avoid any coverage obligations relating to allegations in the Native Village of Kivalina v. ExxonMobil Corp., et al. litigation reveals some of the arguments the insurance industry is likely to make in this arena.
The Kivalina litigation involves allegations that various energy companies have contributed to global warming which will, in turn, require an Inupiat village to incur hundreds of millions in expenses to abandon and relocate its village. One of the defendants, AES Corporation, tendered the Kivalina lawsuit to its insurer, Steadfast, who promptly proceeded to sue AES seeking a declaration from a Virginia court that it had no obligation to defend or indemnify AES.
This case is being closely watched by the insurance industry and their lawyers, and may well be viewed as a test case by the industry. In the coverage litigation, Steadfast claims that emission of carbon dioxide is a “pollutant” and thus excluded under its policy even though carbon dioxide is not specifically referenced in its exclusion language. Steadfast also argues in its complaint that any damage claimed by the Kivalina plaintiffs is not the result of an “accident” and that because some of the alleged damage to the village may have occurred prior to Steadfast’s policy period, it is not required to cover any of the loss.
Many of these coverage issues have been extensively litigated in other contexts, particularly in the hundreds of environmental and asbestos coverage cases over the past three decades. Despite many prior decisions finding in favor of coverage under factual circumstances nearly identical to the Kivalina facts, it is clear that the insurance industry is preparing to litigate these yet again.
http://www.globalclimatelaw.com/admin/trackback/85728
