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Sunbeam Corp. v. Liberty Mutual Insurance Co.

Although CGL policy covered only "sudden and accidental" pollution cleanup, manufacturers successfully pled regulatory estoppel and "special usage in trade" as grounds for indemnification of long-term pollution remediation.

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ARGUED: March 5, 2001

OPINION OF THE COURT

Appellant manufacturing corporations are insured by appellee insurance companies under comprehensive general liability policies. At issue is the insurers’ obligation to indemnify the manufacturers for the costs of cleaning up environmental pollution caused by the manufacturers. The insurance policies cover pollution if it was “sudden and accidental,” but not otherwise. The manufacturers maintain that according to the usage in the industry, those words mean “unexpected and unintended.” The trial court and Superior Court disagreed, holding that the common meaning of the words “sudden and accidental” is unambiguous and does not cover pollution which occurred gradually over a long period of time whether or not the pollution was unexpected and unintended. The trial court therefore granted the insurers’ demurrer and dismissed the complaint with prejudice. Superior Court affirmed.

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