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UPDATES: ALCOA CLEANUP COVERAGE DENIED

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Alcoa cleanup coverage denied

SEATTLE-The third-party liability insurers of Aluminum Co. of America and its Northwest Alloys Inc. unit do not have to pay most of the millions of dollars the companies face for pollution cleanup costs, a judge has ruled.

The pollution exclusions in Alcoa's third-party liability insurance policies barred coverage for 30 of 32 contaminated sites, Washington Superior Court Judge Kathleen Learned ruled, granting summary judgment to the insurers.

The coverage, led by Commercial Union Insurance Co., only granted coverage for sudden and accidental pollution. Sudden "contains a temporal element that requires that the discharge be abrupt and lasting only a short time," Judge Learned said. To be considered accidental, a discharge must be unexpected and unintended.

The next step in the litigation regarding the third-party liability insurers is unclear, said Thomas Reiter, a partner at Kirkpatrick & Lockhart in Pittsburgh who represents the aluminum company.

Alcoa blames the pollution on various problems, many of which were site-specific, that the company says were sudden and accidental, but the judge rejected those arguments.

Despite the ruling on the third-party liability policies, Alcoa still is seeking coverage under its first-party property policies, Mr. Reiter said.