Section 15.10 Qualified Pollution Exclusion

• Library: Insurance Practice 2015

The standard CGL form pollution exclusion bars coverage for:

“Bodily injury” or “property damage” arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants” . . .

Copyright, Insurance Services Office, Inc., 2000.

But previous CGL policies included a “sudden and accidental” exception to the pollution exclusion. This exception provided that the pollution exclusion did not apply if the discharge was sudden and accidental. The meaning of the terms “sudden and accidental” has been heavily litigated. Insurers argue that the term “sudden” has a temporal meaning. Insureds argue that the term is ambiguous and connotes unexpected or without prior notice.

There are few Missouri appellate decisions interpreting this language. In Aetna Casualty & Surety Co. v. General Dynamics
Corp., 968 F.2d 707 (8^th Cir. 1992), the Eighth Circuit held that:

The term “sudden,” we believe, “when considered in its plain and easily understood sense, . . . is defined with a ‘temporal element that joins together conceptually the immediate and the unexpected.’”

Id. (quoting Upjohn Co. v. N.H. Ins. Co., 476 N.W.2d 392, 397–98 (Mich. 1991)); see also Indep. Petrochem. Corp. v. Aetna Cas. & Sur. Co., 842 F. Supp. 575, 580–81, 583 (D. D.C. 1994) (under Missouri law, “sudden” as found in pollution exclusion clause is synonymous with “abrupt”). The Eighth Circuit continues to apply its General Dynamics definition. Liberty Mut. Ins. Co. v. FAG Bearings Corp., 153 F.3d 919 (8^th Cir. 1998) (citing Gen. Dynamics Corp., 968 F.2d 707). In Liberty Mutual, the insured had recurring malfunctions with a degreasing system that allowed trichloroethylene (TCE) to escape from the system. Despite these...