Insurer must defend claims based on insured’s use of non-pollutant floor sealer
Source: http://www.lexology.com, February 15, 2013
By: David Erickson and Mark Anstoetter, Shook Hardy & Bacon LLP
A federal court in Missouri has determined that a floor-sealing product used by a construction cleanup company was not a “pollutant” and that the company’s insurer must defend and indemnify claims based on exposure to the sealant’s fumes. United Fire & Cas. Co. v. Titan Contractors Serv., Inc., No. 4:10-CV-2076 CAS (E.D. Mo. 1/28/13).
The insured company was in the business of providing construction cleanup services and also, several times a year, would apply a sealant to concrete floors after cleaning them. It used one of the sealants, TIAH, on floors adjacent to office space in a business park, and several office workers brought a personal injury action alleging that they had experienced headaches, wheezing and throat irritation from inhaling sealant fumes. The company sought coverage from its insurer, which concluded that the sealant was a “pollutant,” so that coverage was precluded under the policy’s absolute pollution exclusion.
Applying Missouri law to the coverage dispute and finding the interpretation of a total pollution exclusion unaddressed by the state supreme court, the court predicted that Missouri courts would take a common sense approach and analyze whether the insurance policy’s language “is plain and unambiguous by what the layman who bought and paid for the policy would ordinarily have understood.” Calling it a “close case,” the court determined, “[T]here is ambiguity in the policy language as it relates to Titan’s [the insured’s] allegedly negligent application of TIAH to seal the concrete floor.” Because the sealant “belongs in the environment in which the insured routinely works,” the court held that it was “reasonable for Titan to expect that its work sealing concrete floors would be covered by its commercial general liability insurance policy, and that TIAH would not be deemed a pollutant.” Accordingly, the insurer was required to defend and indemnify the insured company on the claims asserted against it.
