Section 15.2 Response Costs as Damages

• Library: Insurance Practice 2015

Under the standard Insurance Services Office (ISO) form comprehensive general liability (CGL) policy, an insurer promises to “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” Copyright, Insurance Services Office, Inc., 2000. Insurers and policyholders have opposing viewpoints on whether environmental remediation costs are sums that the insured is obligated to pay as “damages” within the meaning of this language.

Note: References to “standard form” policies are to standardized insurance policy forms promulgated by the ISO, or its predecessor, the Insurance Rating Bureau (IRB). ISO develops standard policy forms “including provisions regarding coverage, exclusions, definitions, conditions, and endorsements” for use by member and subscriber insurance companies. Although a majority of casualty insurers use ISO standard form policies and endorsements, some policies may contain variations of the standard form provisions. Because a...