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DENVER-Injuries arising from the release of ammonia gas are not covered under commercial general liability policies containing the 1985 absolute pollution exclusion, the Colorado Court of Appeals has ruled.
Further, damages are not payable under personal injury coverages, the court ruled.
In upholding the lower court's decision, the appeals court rejected the policyholder's argument that the pollution exclusion only pertained to industrial environmental pollution.
The case was brought by Terramatrix Inc., an engineering and environmental consulting firm. In 1994, the firm's printing machine allegedly emitted ammonia gas due to improper ventilation, and another tenant in the building suffered bodily injuries and was forced to move offices.
The tenant sought damages from Terramatrix, which turned to its insurers, United States Fire Insurance Co. and Reliance National Indemnity Co., to cover the claim. Both insurers denied coverage.
The appeals court held that "ammonia constitutes a pollutant under the pollution clause."
Further, the court ruled that personal injury coverage for wrongful entry or invasion of the right to private occupancy were inapplicable in this case.
Personal injury coverage is unambiguous and is "applicable only to entries, evictions and invasions committed by or on behalf of the owner, landlord or lessor," the appeals court ruled.
The decision is important because is explicitly rejects a common policyholder argument that the pollution exclusion is only applicable to hazardous waste cleanups, said Laura A. Foggan, a partner at Wiley, Rein & Fielding in Washington who represents the Insurance Environmental Litigation Assn., which filed an amicus brief in this case.
"The court recognized that the exclusion contains no such limitation," she said.