Environmental Contamination Clean-up and Response
Such remediation is typically performed at the direction and oversight of a Licensed Site Remediation Professional (“LSRP”). This is not cheap. However, your insurance company is likely to deny coverage for such remediation if you have a typical homeowner’s or Comprehensive General Liability (“CGL”) insurance policy. That is because such policies typically include an “Owned Property” exclusion, which bars coverage for damage to property owned, occupied, rented, borrowed or physically controlled by you, or property which you use for your business.
But, in New Jersey, groundwater is owned by the state. Reliance Ins. Co. v. Armstrong World Industries, Inc., 292 N.J. Super. 365 (App. Div. 1996); United Mobile Homes, Inc. v. Foremost Ins. Co., 292 N.J. Super. 66 (App. Div. 1996); Edward Sagendorf v. Selective Ins. Co. of America, 293 N.J. Super. 81 (App. Div. 1996). The Supreme Court of New Jersey, in State v. Signo Trading International, Inc., 130 N.J. 51 (1992), held that where damage to third-party property exists, costs incurred to remediate damage on the policyholder’s own property are covered if those measures are intended to prevent further damage to third-party property. Id. Conversely, costs incurred to remediate soil pollution unrelated to groundwater contamination are not covered expenses under CGL policies by application of the owned property exclusion. Signo, 131 N.J. at 51; Strand, 292 N.J. Super. at 476. Where there is evidence that costs have been incurred to remediate soil pollution unrelated to groundwater contamination, an allocation of remediation expenses between soil and groundwater is necessary. Universal-Rundle Corp. v. Commercial Union Ins. Co., No. A-5607-96T2 (March 12, 1999, App. Div.); Strand, 292 N.J. Super. at 482-83.
If you have been the unfortunate victim of an environmental contamination at your property do not automatically think the remediation of your property must be paid entirely out of pocket. Some or all of those costs may be covered loss to be paid by your insurance company. Call Verp and Leddy today. We are happy to review the facts of your case to determine if you have a case against your insurance company.
Environmental Pollution Exclusions
In New Jersey, the sudden and accidental pollution exclusion has been limited in its application to intentional discharges of known pollutants. Morton Int’l., Inc. v. General Acc. Ins. Co., 134 N.J. 1 (1993). In Universal-Rundle Corp. v. Commercial Union (Appellate Div. 1999) the court ruled that the insured’s knowing discharge of waste materials containing small amounts of lead oxide, which the insured knew could be hazardous health if inhaled, was not the discharge of a “known pollutant” because the insured had no knowledge at the time that the discharges into the environment could cause injury (the insured testified it believed that the waste was good fill.).
The New Jersey Supreme Court’s decision in Carter-Wallace, Inc. v. Admiral Ins. Co., 154 N.J. 312 (1998), found that the insurer bore the burden of proving that Carter-Wallace expected or intended the contamination at the site. Id. at 328. Because the qualified pollution exclusion has been limited in its application to intentional discharges of known pollutants, New Jersey courts are reluctant to require you as the insured to prove negative facts, and insurers ordinarily bear the burden of proof as to policy exclusions.
If you have experienced a discharge of pollutants of any kind, you are most likely entitled to coverage unless it can be proven by your insurance carrier that you knew and intentionally discharged them. Do not let your insurance company tell you any differently without first contacting us.
