Christian, Kravitz, Dichter & Johnson
2700 N. Central Avenue, Suite 1200
Phoenix, Arizona 85004
P: 602-792-1700
F: 602-792-1710

8985 S. Eastern Avenue, Suite
200 Las Vegas NV 89123
P: 702-362-6666
F: 702-992-1000

The CGL Policy Exclusion for Pollution

A form CGL or comprehensive general liability policy insuring a business against liability for personal injury or property damage of a third party caused by the business has various exclusions from coverage for which separate insurance must be purchased. One such exclusion is Exclusion F for pollution.

In the early 1970s, an endorsement was added to standard CGL policies to exclude coverage of property damage claims resulting from pollution that was not sudden and accidental. As responsibilities imposed by statute on businesses for pollution and cleanup costs and resulting litigation grew, a pollution exclusion added to the standard CGL policy was modified and expanded until Exclusion F excluded coverage under the CGL policy for the following:

(1) ''Bodily injury'' or ''property damage'' arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:

(a) At or from any premises, site or location which is or was at any time owned or occupied by, rented or loaned to, any insured;

(b) At or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste;

(c) Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for any insured or any person or organization for whom you may be legally responsible; or

(d) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations;

(i) if the pollutants are brought on the premises, site or location in connection with such operations by such insured, contractor or subcontractor; or

(ii) if the operations are to test for, monitor, clean up remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants.

Subparagraphs (a) and (d)(i) do not apply to ''bodily injury'' or ''property damage'' arising out of heat, smoke or fumes from a hostile fire.

As used in this exclusion, a hostile fire means one which becomes uncontrollable or breaks out from where it was intended to be.

(2) Any loss, cost or expense arising out of any:

(a) Request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants; or

(b) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of pollutants.

Pollutants mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.

Due to the numerous amendments of the standard CGL policy exclusion for pollution, each policy should be reviewed carefully for the particular language of its pollution exclusion. If coverage is excluded which the insured would want to obtain, standard endorsements and separate policies from specialty insurers are available to an extent. Standard endorsements to the CGL policy have been drafted that would provide coverage for particular types of occurrences of pollution or potential pollutants.

                   Copyright 2011 LexisNexis, a division of Reed Elsevier Inc.