Articles Posted in Environmental

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photo looking upward and to the sky of the Illinois Supreme Court buildingThe Illinois Supreme Court has teed up a significant insurance question: Does a standard pollution exclusion bar coverage when the alleged “pollution” was not considered to be pollution when the policy issued—where the substance was lawfully emitted under an environmental permit?

The court accepted a certified question from the Seventh Circuit on April 17, 2025, in Griffith Foods International Inc. v. National Union Fire Insurance Co.—a case that springs from the Sterigenics ethylene-oxide suits. The court’s agreement to consider the question signals the potential for a landmark ruling on the scope of pollution exclusions, with far-reaching implications for companies dealing with environmental and related toxic tort claims.

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We have previously written on the evolving risks associated with PFAS—also known as “forever chemicals”—and their implications for policyholders navigating environmental liabilities involving both PFAS and PFAS-related chemicals (i.e., fluorinated chemicals that do not fit the definition of PFAS). Our prior analyses explored coverage strategies and regulatory enforcement trends. With regulatory activity and litigation continuing to accelerate, we are circling back to provide an updated look at the regulatory and legal landscape surrounding PFAS, including recent federal developments, insurer responses and practical guidance for policyholders navigating this complex and high-stakes area. To meet these risks, policyholders with potential exposure are well advised to review their general liability coverages, including both historical occurrence-based policies, pollution legal liability policies and any new terms added to current renewals.

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GettyImages-1266969516-300x200In what was likely a shock to coal-fired electric utilities, the U.S. Court of Appeals for the District of Columbia Circuit held on June 28, 2024, that proposed decisions by the U.S. Environmental Protection Agency in January 2022—prohibiting coal-fired power plants from closing coal ash impoundments where coal ash is in contact with groundwater—were a “straightforward application” of a previously promulgated agency rule. In Electric Energy, Inc. v. Environmental Protection Agency, the appeals court validated EPA’s actions as a proper exercise of authority. This ruling ends (at least for now) a regulatory odyssey that began in 2015.

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GettyImages-185062212-300x199Temperatures in Arizona this week reached over 110 degrees Fahrenheit. The water temperature in the Florida Keys was reported to reach sauna-like levels, threatening the life of habitat-sustaining coral. Atmospheric conditions are routinely blamed for violent storms and for wildfires that darken the skies.

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In the last decade, per- and polyfluoroalkyl compounds (PFAS) increasingly have become the subject of actual or potential liability for a widening group of companies, with potential liability arising from both private tort lawsuits and governmental enforcement of environmental laws and regulations. In a recent Practical Guidance® Practice Note, Insurance Coverage for PFAS Liability, our colleague Tamara Bruno provides a comprehensive breakdown of this rapidly growing area of coverage need.

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In North Carolina, California, Wisconsin and Illinois Sue Companies over PFAS “Forever Chemicals Contamination, colleagues Reza Zarghamee, Mark J. Plumer, Jillian Marullo, Rebecca M. Lee and Ashley L. Meredith examine the lawsuits, along with new state prohibitions and reporting requirements imposed on manufacturers and distributors of products containing PFAS, that signal increased initiative by states to regulate PFAS.

 

 

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GettyImages-1359747893-coal-ash-plant-300x200Early in 2021, we wrote about potential insurance implications that could arise from the then-new Biden Administration’s expected regulatory priorities. Among other things, we noted that heightened scrutiny on coal ash was expected. On January 11, 2022, the U.S. Environmental Protection Agency (EPA) confirmed that prediction, issuing a press release announcing “key steps” it is taking to “protect groundwater from coal ash contamination.” As companies with coal ash liabilities consider EPA’s new guidance and next steps, they should be aware that they may have insurance that could cover some of their coal ash cleanup costs.

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PFAS-1332327258-300x283In August, we provided an overview of the recent increase in regulatory and private litigation activity around per- and polyfluoroalkyl substances (PFAS), colloquially known as “forever chemicals,” and potential insurance coverage for PFAS liability. There have been important developments on the PFAS front in the past few months. Companies with any connection to PFAS need to be cognizant of the evolving regulatory landscape and be prepared to defend against potential PFAS liability. Fortunately, insurance coverage may be available to help mitigate these fast-growing claims—including coverage under historic general liability policies.

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Danger Hazardous Chemicals Sign on a stained storage barrelA key component of a company’s risk management function is to keep a close eye on new and developing sources of liability and to put in place appropriate insurance to respond in the event those liabilities ripen. In recent years, there has been a significant increase in legal and regulatory attention on per- and polyfluoroalkyl substances, more commonly known as “PFAS” or “forever chemicals.” PFAS are used in countless applications, and many companies across the country bear potential liability, from chemical companies to manufacturers to retailers to corporate end users. PFAS-related enforcement is focused on remedying impacts to both the environment and human health. Importantly, a company’s liability for PFAS-related contamination or bodily injury may be covered under historic general liability policies and/or modern-day pollution liability policies. As regulation and litigation relating to these ubiquitous substances continues to surge, corporate policyholders with potential exposure should be proactive to examine their insurance portfolios and position themselves for potential insurance coverage in the event they become a PFAS liability target.

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Red sign hanging at the glass door of a shop saying: "Going out of business".In recent weeks, two insurers with significant legacies of occurrence-based general liability coverage took important steps to liquidate their estates.

Bedivere Insurance Company (OneBeacon) Liquidation

The first insurers are associated with Bedivere Insurance Company, formerly known as OneBeacon Insurance Company (OBIC). OBIC’s history stretches back to the 1800s but is most well known as the successor to the General Accident and Commercial Union families of insurers. These companies wrote many policies from the 1960s through the 2000s and include Commercial Union Assurance Company, Employers Commercial Union Insurance Company, Employers’ Surplus Lines Insurance Company, Employers’ Liability Assurance Corporation Limited, General Accident Insurance Company, and CGU Insurance Company (and many other smaller companies). OBIC stopped writing new business in 2010 and entered run-off, paying claims from its historic exposures. In 2014, OneBeacon Group, OBIC’s parent, sold its run-off business to a Bermuda entity called Armour Group. The transaction included OBIC and other subsidiaries (Potomac Insurance Company, OneBeacon America Insurance Company, and The Employers Fire Insurance Company). OBIC changed its name to Bedivere Insurance Company in 2015, and in October 2020, absorbed its subsidiaries by merger.

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