Court Rejects Umbrella Coverage for Oil Spill Cleanup Costs where Underlying Insurance Requirements were Not Satisfied

Source: https://www.jdsupra.com/, May 14, 2020

On May 6, 2020, a Montana federal court ruled that an insurer was not obligated to cover $1 million in cleanup costs incurred by an umbrella policyholder after spilling 238 barrels of crude oil and 1,200 barrels of production water into tail-water of the North Chinook Reservoir. In reaching that conclusion, the Court principally relied upon the umbrella policy’s exclusion of coverage for damage “arising out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, release or escape of pollutants.”  Read more.

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