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Rhode Island high court rules in policyholder’s favor in pollution case

Posted On: Jan. 30, 2023 3:23 PM CST


The Rhode Island Supreme Court reversed a lower court Friday and ruled in a heating and air conditioning company’s favor, holding the discovery of 170 gallons of home heating oil in a basement did not fall under a pollution exclusion.

Providence, Rhode Island-based Regan Heating and Air Conditioning Inc. purchased a commercial package policy from Quincy, Massachusetts-based Arbella Protection Insurance Co. that included the exclusion, according to the state high court’s unanimous ruling in Regan Heating and Air Conditioning Inc. v. Arbella Protection Insurance Co.

In May 2015, Regan was in the process of removing an older heating system and installing a new one for a home when it discovered the home heating oil in the basement, the ruling said.

Regan filed suit against the insurer after it said oil is a pollutant excluded under its coverage, charging breach of contract and bad faith.

The Rhode Island Supreme Court overturned a lower court ruling in the insurer’s favor. “Oil, and more specifically home heating oil, is not explicitly listed as a pollutant within the policy’s definition,” it said. 

“Accordingly we hold that the policy’s definition of pollution is ambiguous,” it said in vacating the lower court’s ruling.

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