POLLUTION CLAIMS ARISING FROM EMISSIONS FROM DEFECTIVE FURNACES HELD NOT COVERED BY PRODUCTS LIABILITY INSURANCE

POLLUTION CLAIMS ARISING FROM EMISSIONS FROM DEFECTIVE FURNACES HELD NOT COVERED BY PRODUCTS LIABILITY INSURANCE 270_C054

POLLUTION CLAIMS ARISING FROM EMISSIONS FROM DEFECTIVE FURNACES HELD NOT COVERED BY PRODUCTS LIABILITY INSURANCE

A manufacturer of induction furnaces was sued by approximately fifty people who alleged that injuries, disabilities and deaths of present and past employees of an army depot resulted from pollutants emitted from defective furnaces supplied by the manufacturer.

The furnaces were used at the depot to strip and burn rubber from the metal tracks of army tanks and armored personnel and missile carriers. It was alleged that the burning of the rubber released "....hazardous, dangerous and carcinogenic agents into the atmosphere which were then breathed, inhaled, absorbed or otherwise ingested by the workers employed in the rubber branch section." Cancer and numerous respiratory problems were the alleged result. It was also claimed that the manufacturer failed to give adequate warning of the risks.

The insured's comprehensive general liability insurance underwriter denied coverage for the claims on the basis of the current and widely used pollution exclusion. The policy included coverage for the "products/completed operations hazard." The insured filed an action for declaratory relief and both parties moved for summary judgment. The circumstances of the case brought it within federal court jurisdiction.

The insured acknowledged that the exclusion would apply if an insured itself engaged in polluting activities or if pollution occurred at the insured's place of business. But it argued that the exclusion does not apply when injurious particles are released into the atmosphere by a product (used by others) manufactured by an insured and result in injury.

The court found no ambiguity in the policy, stating that the pollution exclusion was "absolute," specifically removing coverage where pollution causes damage. Furthermore, it said that there was no duty to defend when a claim is clearly excluded.

Judgment was rendered for the insurer and against the insured.

(PARK-OHIO INDUSTRIES, INC. ET AL., Plaintiffs v. THE HOME INDEMNITY CO., Defendant. U.S. Court, Northern District of Ohio, Eastern Division. No. l:90CV1046. August 6, 1991. 785 F.Supp. 670. CCH 1992 Fire and Casualty Cases, Paragraph 3760.)