Insurance Law Lesson 68: Is It Pollution?

From Lesson 40: In Michigan, pollution 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).

Lesson 46 discussed that some exclusions are for uninsurable risks, while others are carve outs. The pollution exclusion is a carve out. In other words, there are insurance policies out there that specifically cover pollution risks.

Consider the following industries: pest control, landscaping, dry cleaning, painting. Under Michigan law, do companies doing business in each of these industries need separate pollution insurance policies, or can they rely on their CGL policies?

Now consider this: If you are in one of those industries — or in any other industry that relies on applying some chemical substance to somebody else’s things — would you risk it with just a standard CGL, or would you seek out pollution coverage?

Leave a Reply