Appeals court finds for policyholder in wildfire pollution case
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A federal appeals court ruled Tuesday that an Amtrust Financial Services Inc. unit must pay for the defense of a construction company facing a bodily injury claim related to the cleanup of the 2018 Camp Fire in California.
The ruling by the 9th U.S. Circuit Court of Appeals in San Francisco in Wesco Insurance Co. v. Brad Ingram Construction overturned a lower-court decision that the pollution exclusion in the construction company’s policy barred coverage.
The case stemmed from cleanup work conducted after the devastating Camp Fire. A truck driver for a subcontractor of Brad Ingram alleged he fell seriously ill after being exposed to toxic dust while transporting debris from the wildfire to a hazardous waste site. The driver alleged that the dust was “stirred up” by workers, who all wore protective equipment when they loaded the truck, and it entered the cab via the ventilation system.
A U.S. district court ruled in 2022 that Wesco did not have a duty to defend the truck driver’s suit because the toxic dust fell within the policy’s definition of a pollutant.
In overturning the decision, the appeals court held that “while wildfire debris may be considered a ‘pollutant’ in certain circumstances, the mechanism of exposure described in the complaint does not clearly constitute” an event commonly thought of as pollution.
“[T]here existed a potential for coverage under the insurance policy, and Wesco had a duty to defend the litigation,” the appeals court ruled.
Amtrust did not immediately respond to a request for comment.
