Case Briefs

The Court of Appeals of Indiana, applying Maryland law, recently held that contamination caused by the release of perchlorate constitutes traditional environmental pollution and is thus subject to the total pollution exclusion in a commercial general liability (CGL) policy. Chubb Custom Insurance Co., et al. v. Standard Fusee Corp., No. 49A02-1301-PL-91 (Ind. Ct. App. Jan. 23, 2014). The court also held that such contamination does not trigger coverage under a personal injury coverage part that provides coverage for personal injury arising out of “wrongful entry into” the premises of another.

This decision is a reminder of the importance of choice of law determinations in environmental coverage litigation, a point not lost on Standard Fusee and its insurers. They battled all the way to the Indiana Supreme Court over the question of the law governing insurance policies covering multiple risks in multiple states, where the Indiana high court concluded that a “uniform-contract-interpretation” approach should be followed such that the law of a single state is applied to interpretation of the contract. Nat'l Union Fire Insurance Co. of Pittsburgh, PA, et al. v. Standard Fusee Corp., No. 49S04-1006-CV-318 (Ind. Dec. 29, 2010). The Indiana Supreme Court further held that, under that approach, Maryland law governed whether various liability policies provided coverage for alleged or potential contamination at the policyholder's former California facility and at its Indiana facility.