SW Legal studies in Business

Pollution Exclusion Does Not Apply to Appliance Malfunction
Description Ohio high court held that the pollution exclusion in a general liability policy did not relieve the insurer from liability in a case where the malfunction of a heater in an apartment caused carbon monoxide poisoning. The exclusion was not specifically directed at such an incident and so does not exempt the insurer.
Topic Insurance
Key Words Commercial General Liability; Pollution Exclusion
C A S E   S U M M A R Y
Facts Lisa Andersen died due to breathing carbon monoxide fumes from a faulty heating unit in the Highland House Apartments where she lived. Highland was covered by commercial general liability (CGL) insurance issued by Indiana Insurance Company (IIC). Andersen's estate sued Highland for wrongful death. IIC contended its policy did not apply to this incident because it excluded damages from environmental pollution. The trial court held IIC's policy was not excluded; the appeals court held that it was excluded; Andersen appealed.

Reversed. The pollution exclusion in the CGL policy was ambiguous. It did not clearly exclude claims for deaths or injuries caused by residential carbon monoxide poisoning. An insurer must establish not merely that the policy is capable of the construction that it favors, but that such an interpretation is the only one that can fairly be placed on the language in question. The presumption is that the pollution exclusion applied to gradual environment degradation or responsibility for government-mandated cleanup. Carbon monoxide from a faulty residential heater is not a "pollutant" within the meaning of the exclusion here unless the policy clearly specified such exclusion.

Citation Andersen v. Highland House Company, 757 N.E.2d 329 (Sup. Ct., Ohio, 2001)

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