Indiana and Maryland: Insurance Company Use of Pollution Exclusions 'Strange' and 'Absurd'

Recently, the Indiana Supreme Court in American States Ins. Co.v. Kiger, (Mar. 27, 1996) held that a gas station owner is entitled to a defense, and possibly indemnification, against claims by neighbors alleging environmental property damage.  The court held that liability insurance coveragewas available under both pre-1987 liability insurance policies containing the so-called “sudden and accidental” pollution exclusion and also under post-1987 liability insurance policies containinga version of the so-called “absolute” pollution exclusion.