A federal appeals court on Thursday overturned a lower court ruling that had favored a General Re Corp. unit in a dispute with a trucking company in a pollution case, holding that an endorsement in its excess policy was ambiguous.

On Feb. 19, 2019, a tanker truck owned by Fitchburg, Massachusetts-based Performance Trans Inc., overturned in North Salem, New York, and spilled about 4,300 gallons of gasoline and diesel fuel on the roadway and into a nearby reservoir, according to the ruling by the 1st U.S. Circuit Court of Appeals in Boston in Performance Trans., Inc.; Utica Mutual Insurance Co. v. General Star Indemnity Co.

Remediation work has cost almost $3 million to date, according to the ruling.

At the time of the accident, PTI had about $1 million in primary insurance from New Hartford, New York-based Utica Mutual and a $5 million excess policy from Gen Re unit General Star, according to the ruling.

After cleanup costs exceeded the Utica policy, PTI filed a claim with General Star, which denied coverage based on a “total pollution” exclusion in its policy.

PTI and Utica Mutual filed suit in U.S. District Court in Worcester for breach of contract, arguing there was coverage under a “special hazards” endorsement in the Gen Re coverage, or that at least the policy was ambiguous.

The district court held the policy was unambiguous and ruled in favor of Gen Re. It was overturned by a unanimous three-judge appeals court panel, which concluded the special hazards endorsement was ambiguous, and “susceptible to at least three different interpretations.”

“Nothing in the text of the Endorsement conclusively favors one interpretation over the others,” nor do other policy provisions resolve the ambiguity, the ruling said.

“In these circumstances, neither PTI’s nor General Star’s interpretation of the Special Hazards Endorsement is unreasonable,” the ruling said. “Massachusetts law is unequivocal that faced with two plausible interpretations of the policy, we must construe all ambiguity in favor of the insured,” it said, in reversing the lower court ruling.

Attorneys in the case did not respond to requests for comment.