The Big “I” Virtual University (VU) will address an important—but seldom covered—topic in today’s environmentally conscious world: pollution.
Register for the upcoming webinar, Pollution…You’re Not Properly Insuring It! on April 20 for information similar to the following Q&A from the VU’s Ask an Expert service:
A contractor is hauling an oil tank on his flatbed trailer to a disposal site. The tank leaks a small amount of oil onto the road and a motorcycle behind the truck slides on the oil, injuring the driver. The insurance carrier denies the loss based on the pollution exclusion in the business auto policy, citing exclusion B, item 11.
Q: "My argument is that the intent of the claim is to exclude damage caused by pollutants, and that had the liquid leaking been honey or ice cream, or even water for that matter, the claim would have been paid.
The carrier responded that, while it agrees 'the fact pattern with this claim is not your typical claim to consider the pollution exclusion,’ no case law refutes the intent of this exclusion, so it must rely on the wording on the policy. Has this type of claim ever been challenged before?"
A: “If they want to address case law, it is the insurer's obligation to produce the case law that supports the exclusion. Liability coverage is akin to ‘all risk’ or named exclusions property insurance. That means the burden of proof is on the insurer, not the insured, to produce evidence to support an exclusion.
Our consensus is that this denial is not in keeping with the spirit of the pollution exclusion, as the VU faculty comments on the Abusing the Pollution Exclusion webpage.”
For more information on the VU or other webinars, contact VU staff. Forgot your password? Recovery is available here.