Companies with coal ash facilities should review their insurance coverage as they face regulatory enforcement to safely clean up and close the sites.
While pollution exclusions may be a barrier to coverage for related coal ash liabilities, historic general liability insurance policies and in some instances current environmental policies may provide recourse, experts say.
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Coal ash sites are considered potential sources of groundwater contamination, and many are old facilities that could trigger historic insurance policies, said Robert D. Chesler, shareholder in the Newark, New Jersey, office of Anderson Kill P.C.
“We’re looking principally at property damage in the form of groundwater contamination. The general liability policy provides coverage for property damage and groundwater is property, and in every state pollution of groundwater is covered property damage,” Mr. Chesler said.
However, pollution exclusion clauses are a key consideration. In 1986, the insurance industry introduced an absolute pollution exclusion into commercial general liability policies, “so there’s no coverage under policies in effect after that date,” he said.
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