Insurance Law Lesson 40: Pollutants (2)

The pollution exclusion arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants”

A pollutant is typically defined in the policy as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.”

In some states, like New York, pollution exclusions are applied only to environmental pollution. Natl Union Fire Ins. Co. v. Burlington Ins. Co., (Sup. Ct. NY Co. Apr. 27, 2018),

But, in Michigan, the exclusions are not so limited. See e.g. McKusick v Travelers Indem Co, 246 Mich App 329, 334 (2001). For example, sewage is a pollutant under Michigan law. City of Grosse Pointe Park v Michigan Mun Liab & Prop Pool, 473 Mich 188 (2005). The Michigan Supreme Court has questioned whether cleaning products would be excluded (as “irritants” or “contaminants”). Hastings Mut Ins Co v Safety King, Inc, 286 Mich App 287 (2009).

If your business has anything do with anything that could be considered an “irritant” or “contaminant,” you may want to discuss whether this exclusion would preclude coverage for your standard business activities.

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