A New York district court has held that an insurer must provide coverage under three excess insurance policies issued in 1970 for defense and cleanup costs incurred by Olin Corporation in remediating environmental contamination at seven sites in Connecticut, Washington, Maryland, Illinois, New York, and Washington. Seven of the remaining sites at issue presented questions of fact for trial, with only one site being dismissed due to lack of coverage.

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Last week, the Second Circuit remanded environmental coverage litigation between Olin Corporation and OneBeacon based on its conclusions that (1) all sums allocation applied and (2) a prior insurance provision allowed OneBeacon the opportunity to show that prior excess insurers had made payments for the same claims, thereby reducing OneBeacon’s liability for Olin’s remediation costs at five manufacturing sites.

The district court had calculated OneBeacon’s liability on a pro rata allocation. Based on the New York Court of Appeals’ intervening decision in Viking Pump (previously covered here, the Second Circuit found that an all sums allocation should apply. The decision thus allows Olin to obtain full indemnification under OneBeacon’s policy for amounts spent to remediate the manufacturing sites, up to the limits of that policy. Because the district court had applied a pro rata allocation based on pre-Viking Pump case law, the Second Circuit remanded for the district court to recalculate damages.


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Last Thursday, a federal district judge in New Jersey denied, in part, Travelers Indemnity Company’s (Travelers) motion for summary judgment on claims for indemnity costs because the plaintiff, E.M. Sergeant Pulp & Chemical Company (EMS), provided sufficient evidence to raise triable questions of fact. Although the evidence was just “barely sufficient” to keep the case alive, as the court put it, and despite no direct evidence that policies were even in place during the relevant time period, the evidence was nevertheless enough to defeat the insurer’s motion.

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The Court of Appeals of Georgia recently found an excess insurer liable for environmental costs related to a leak in an insured’s pipeline.  In doing so, the court rejected the insurer’s argument that liability for the costs should be spread among policies issued by other insurers spanning nearly three decades.  The opinion is available here.

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A federal judge in Indiana recently found that an insurer is not entitled to control the defense of its insured because a conflict of interest exists where the insurer is in litigation with the insured over an alleged policy breach arising out of the manner in which underlying litigation would be defended. Valley Forge Insurance Co. v. Hartford Iron & Metal Inc., et al., No. 1:14-cv-00006-RLM-SLC, N.D. Ind. (Dec. 7, 2015).

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