outsidethebox7331
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I am a current RMIS student and I am having difficulty with this assigned case. We utilize the CG 00 01 04 13 CGL Policy for our cases. I am leaning towards the pollution exclusion (1).(a).(iii) however I cannot think of a defense the Insurer would utilize to combat this exception to the exclusion. Any help is greatly appreciated! Thank you
In January 2019, the Autry Farms (“Autry”) contracted with Industrial Herbicides, Inc. ("IBI") to treat a crop of potatoes to prevent sprouting. Sprouting makes the potatoes less desirable to a consumer, hence less valuable. The potatoes were stored in a storage facility. Autry had a property insurance policy which insured against the risk of loss or damage to the storage facility and the stored potatoes issued by Idaho Northern Insurance Corporation.
IBI treated the stored crop of potatoes by spraying them with a sprout-inhibiting chemical. A fire broke out while IVI was spraying the potatoes, damaging the storage facility and the stored crop of potatoes. The fire was caused by flammable fumes emitted by the chemical brought to the facility by IBI.
Idaho Northern paid $150,000 to Autry to settle the claim for the damage to the potatoes caused by the fire. Idaho Northern then filed suit against IBI to recover the $150,000 it paid to Autry. Idaho Northern alleged the fire was caused by IBI’s negligence in the way and manner in which IBI stored the chemical at Autry’s storage facility.
Wilmette Casualty Co. issued a CGL policy to IBI that was in effect on the day the fire happened. IBI tendered the lawsuit to Wilmette and demanded a defense. Wilmette reviewed the lawsuit and the policy. Wilmette informed IBI that the claim asserted against it by Idaho Northern in the lawsuit was not covered by the CGL. IBI then sued Wilmette for breach of contract for refusing to defend and indemnify it.
I am a current RMIS student and I am having difficulty with this assigned case. We utilize the CG 00 01 04 13 CGL Policy for our cases. I am leaning towards the pollution exclusion (1).(a).(iii) however I cannot think of a defense the Insurer would utilize to combat this exception to the exclusion. Any help is greatly appreciated! Thank you
In January 2019, the Autry Farms (“Autry”) contracted with Industrial Herbicides, Inc. ("IBI") to treat a crop of potatoes to prevent sprouting. Sprouting makes the potatoes less desirable to a consumer, hence less valuable. The potatoes were stored in a storage facility. Autry had a property insurance policy which insured against the risk of loss or damage to the storage facility and the stored potatoes issued by Idaho Northern Insurance Corporation.
IBI treated the stored crop of potatoes by spraying them with a sprout-inhibiting chemical. A fire broke out while IVI was spraying the potatoes, damaging the storage facility and the stored crop of potatoes. The fire was caused by flammable fumes emitted by the chemical brought to the facility by IBI.
Idaho Northern paid $150,000 to Autry to settle the claim for the damage to the potatoes caused by the fire. Idaho Northern then filed suit against IBI to recover the $150,000 it paid to Autry. Idaho Northern alleged the fire was caused by IBI’s negligence in the way and manner in which IBI stored the chemical at Autry’s storage facility.
Wilmette Casualty Co. issued a CGL policy to IBI that was in effect on the day the fire happened. IBI tendered the lawsuit to Wilmette and demanded a defense. Wilmette reviewed the lawsuit and the policy. Wilmette informed IBI that the claim asserted against it by Idaho Northern in the lawsuit was not covered by the CGL. IBI then sued Wilmette for breach of contract for refusing to defend and indemnify it.
- Why did Wilmette deny the claim asserted against IBI was covered by the CGL.
- Why did IBI believe the claim was covered, i.e., why did IBI believe the reason(s) given by Wilmette in 1. (above) were incorrect.
- How did the court rule and why?