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Member, Beacon International Group, Ltd.
DES MOINES, Iowa-In a loss for policyholders, the Iowa Supreme Court has ruled that the word "sudden" in the sudden and accidental pollution exclusion unambiguously has a temporal meaning.
If "sudden" merely meant unexpected or unintended, then either the word "sudden" or "accidental" in the exclusion would be redundant, the court ruled in Iowa Comprehensive Underground Storage Tank Fund Board vs. Farmland Mutual Insurance Co.
The case involved pollution from leaking underground storage tanks at a former gas station in Ventura, Iowa. The tanks were removed in 1988, and the pollution was discovered in 1990. It was determined that the tanks had been leaking for at least 10 years, court papers say.
The Iowa board, which cleaned up polluted sites for companies and then filed insurance claims, sought coverage under general liability policies issued by Farmland Mutual to the station operator, Hancock County Cooperative.
The trial court ruled in favor of the insurer, and the board appealed.
The Iowa Supreme Court affirmed the trial court's ruling that the pollution exclusion is unambiguous.
In a previous case the court had ruled that accidental should be interpreted as "unexpected or unintended," court papers say.
Therefore, "interpretation of sudden as merely unforeseen or unexpected would render either the term 'accidental' or 'sudden' redundant; they would mean virtually the same," court papers say.
Because the contamination took place more than 10 years ago, it could not be deemed sudden, the court ruled.