SDV Insights

The Federal District Court for the District of Oregon recently decided that Carbon Monoxide constitutes a pollutant within the meaning of a pollution exclusion in a Commercial General Liability (“CGL”) policy.

In Colony Ins. Co. v. Victory Constr. LLC, No. 3:16-cv-00457-HZ (Mar. 14, 2017), the District Court considered whether there was coverage for a pool company that allegedly failed to warn of the “risks of carbon monoxide poisoning associated with operating the heater in an insufficiently ventilated area,” leading to carbon monoxide sickness.

The court correctly acknowledged two primary camps addressing this question.  The first group of courts interprets the pollution exclusion as only applying to traditional environmental pollution, while the second typically finds that the plain meaning of the policy precludes the need to reach that determination.

Here, the court joined the second camp, holding that the plain meaning of the exclusion bars coverage for carbon monoxide.

This is a setback for policyholders.  Still, the decision comes from the district court in Oregon, which only purported to predict the likely outcome should the state’s supreme court address the issue.  The Oregon Supreme Court has not ruled on the issue yet.

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