Courts have upheld insurers’ disclaimers on mold, lead and asbestos claims under comprehensive general liability (CGL) policies, evidencing the importance of maintaining affirmative cover in the emerging environmental insurance marketplace. Removing a CGL mold, lead, or asbestos exclusion is helpful, but insurers may assert a coverage defense and not pay a claim for reasons which have included: failure to meet the burden of proof, failure to trigger coverage, an absolute pollution exclusion, a preexisting condition exclusion, a defective design exclusion, a faulty workmanship exclusion, a business risk exclusion, a known loss or loss in progress, a custody and control exclusion, an owned property exclusion, and late notice. Accordingly, affirmative coverage grants contained in environmental insurance policies are necessary to protect against such losses and maximize recoveries.
Mold, lead, and asbestos claims are all commonly litigated environmental hazards. They represent a serious threat to human health and safety, and claims are expensive to defend and address once they impact the environment. Insurance carriers seek to exclude coverage for these three contaminants in comprehensive general liability (CGL) policies. State court decisions arising from insurance coverage litigation vary because insurance coverage is state substantive contract law, but the vast majority of rulings demonstrate that only environmental insurance effectively covers mold, lead, and asbestos.
