Section 10.12 Exclusion f—Pollution Exclusion

• Library: Insurance Practice 2015

The old CGL policy excluded liability arising out of the discharge, dispersal, release, or escape of pollutants, but the exclusion did not apply if the discharge, dispersal, release, or escape was sudden and accidental. Coverage was excluded for damages arising out of pollution or contamination when the damages appeared to be expected or intended by the insured. An example is White v. Smith, 440 S.W.2d 497 (Mo. App. S.D. 1969), where the insured operated a slaughter house that drained blood, offal, and waste material into the plaintiff’s pond. Although the pollution exclusion was not at issue in the case, the factual situation was one that the pollution exclusion was meant to address. The court found that there was coverage because the insured did not intend the resulting damage. In Aetna Casualty & Surety Co. v. General Dynamics Corp., 968 F.2d 707 (8^th Cir. 1992), the Eighth Circuit, in reversing the trial court, held that the exception to the exclusion was not ambiguous but applied only when the discharge was both sudden and accidental.

The CGL policy has now adopted a virtually total pollution exclusion. There is no coverage for emissions from the insured’s premises. Off-site emissions are covered unless the pollutant is waste or unless the pollutants are brought onto the site in connection with the insured’s operations. Specifically excluded are costs for cleanup done at the direction of the government.

Missouri courts have addressed the...