The purpose of this bulletin is to notify insurers of the Department's concerns regarding the application of the pollution exclusion contained in various liability insurance policies.
A recent court filing (Great American Insurance Company vs. Boxer Property Management Company, Southern District of Texas, Houston Division, CV-03464) raised concerns as to the potential application of the pollution exclusion to be used to deny coverage for a claim in the absence of a pollution incident. The department is concerned that the language in pollution exclusions could be interpreted by a court or insurer to apply to situations and claims that are not intended to be excluded.
Therefore, the Department is requesting that insurers work with trade groups, advisory organizations, Office of Public Insurance Counsel, the Department, and other stakeholders to develop a uniform method of addressing these concerns within a reasonable time.
Further, in connection with this effort, the Department is reviewing previously approved policy forms and endorsements that contain pollution exclusions. The Department will take necessary steps including but not limited to the withdrawal of approval of previously approved policy forms and endorsements to ensure that the application of pollution exclusions is consistent with public policy.
Questions regarding this bulletin should be addressed to:
Mark Worman, Manager
Commercial Property/Casualty Section, Mail Code 104-PC
Texas Department of Insurance, P.O. Box 149104, Austin, TX 78714-9104