Calif. Supreme Court Says Some Cleanups Not Covered.(Brief Article)

National Underwriter Property & Casualty-Risk & Benefits Management, February, 2001 by HOWARD, J.C.

The California Supreme Court, in a 5-2 ruling that could have a significant impact on environmental cleanup activities, said insurers are not bound to cover a company's costs arising from decrees issued by a regulatory agency, but only those stemming from court orders. The case, Certain Underwriters at Lloyd's of London et al vs.

Powerine Oil Co., was one closely watched by insurers, environmentalists and state regulators. The state attorney general, representing California's regulatory community, had unsuccessfully argued that the both sets of costs--regulatory and court-ordered--should be covered by insurers, saying that to do otherwise could thwart the state's ability to require compliance with its environmental rules. Environmentalists agreed. But the...

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