Environmental claims: excess/umbrella carriers may have to clean up after government-mandated orders.(Column)

Best's Review, February, 2006 by Bozeat, Jennifer M.

It is well-known in the world of environmental exposure that policyholders in all jurisdictions face environmental liabilities, subjecting them to costly administrative agency orders--in lieu of formal lawsuits--requiring remediation and abatement of contamination.

Absent the filing of formal litigation, there has been a general understanding among excess/umbrella carriers that they will not be responsible for costs associated with these government-mandated remediation and abatement orders. However, two California Supreme Court rulings call this into question and highlight how critical wording is in determining whether excess/umbrella carriers will need to cover government-mandated orders.

Powerine Oil Co. Inc. vs. Superior Court (Powerine II) and...

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