ELR Citation: 41 ELR 20131
No(s). 09 C 4472 (N.D. Ill. Mar 24, 2011)

A district court held that insurers have no duty to defend or indemnify a city in over two dozen underlying lawsuits alleging that the city delivered contaminated tap water to its residents. The insurance policies at issue contain pollution exclusion clauses. Under Illinois law, a pollution exclusion only applies to traditional environmental pollution. Here, the underlying complaints arise from traditional environmental pollution—the contamination of a water supply—rather than from normal business operations. The underlying complaints allege that the city spread this contamination to thousands of people for decades, causing serious injuries and even death. This widespread contamination is not simply a run-of-the-mill mishap that happens to involve a hazardous chemical, but rather a potentially enormous environmental liability that the pollution exclusion was intended to avoid.