Business Services Industry
Insurers not obligated to defend orders: court. (California Supreme Court rules that insurers are not obligated to defend policyholders from cleanups ordered by government)
Business Insurance, August, 1998 by Souter, Gavin
LOS ANGELES - Insurers do not have a duty to defend policyholders against government-ordered environmental cleanups, the California Supreme Court has ruled. In a 4-3 decision, the court ruled that insurers must defend commercial general liability policyholders only in civil actions started by the filing of a complaint.
The decision resolves contradictory appeals court decisions made last year (BI, July 28, 1997; Oct. 6, 1997). In both cases, the policyholders had received cleanup orders from the California Environmental Protection Agency and sought a defense from their general liability insurers. In Foster-Gardner Inc. vs. National Union Fire Insurance Co. of Pittsburgh, Pa., et al. and Fireman's Fund Insurance Co. vs. the Superior Court of Los Angeles County,...
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