In 1971, the New York State Legislature passed a law mandating that comprehensive general liability (CGL) policies issued to corporate or industrial insureds exclude pollution coverage for all but sudden and accidental pollution claims. In 1982, that statute was repealed. Nevertheless, more than 25 years after its repeal, the statute continues to impact current insurance coverage disputes. Just this past August, Judge Eileen Bransten relied on the statute and the public policy behind it in Travelers Indemnity Company v. Orange and Rockland Utilities Inc.1
In Travelers Indemnity, the insured utility sought coverage for damages arising from the historic operation of manufactured gas plants under certain CGL policies issued by Travelers. Travelers had issued the policies between Jan. 1, 1970 and Feb. 15, 1978. Travelers denied coverage for the claims, relying on New York’s former statutory pollution exclusion. Although none of the policies actually contained an express pollution exclusion, the court held that the statutory pollution exclusion must be read into the policies because “New York courts have repeatedly recognized that the Statutory Pollution Exclusion, by operation of law, applies to all insurance policies issued during the period the statute was in effect.”2
Statutory Pollution Exclusion
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