Acknowledgement to XL Environmental
THE CLAIM
Litigation was initiated by a water district against three companies for Freon contamination of a water supply well used by local residents. These three companies, in turn, filed a third-party claim against the insured as the prior owner of the facility from which the contamination discharged. Freon, which was leaking from an air conditioning system, impacted the water supply well. A $2,000,000 water treatment system was installed by the local authorities to treat the impacted water.
THE RESPONSE
XL’s environmental claims counsel and a technical consultant worked with the insured to investigate whether and when the Freon release occurred. Local defense counsel was retained to defend the insured’s interests in the litigation. A mechanical engineer was retained to assist in determining whether and how Freon contamination could have occurred. A hydrologist was retained to assist in evaluating technical issues involved in the source, timing, and extent of Freon contamination.
THE SOLUTION
Evidence uncovered during discovery revealed that Freon releases occurred prior to the insured’s ownership. There was no evidence established that a Freon release occurred during the insured’s ownership. The insured’s Pollution and Remediation Legal Liability Policy paid in excess of $425,000 for all costs and expenses associated with the litigation.