ELR Citation: 41 ELR 20099
No(s). 5:10 CV 673 (N.D. Ohio Feb 11, 2011)

A district court held that an aerospace and technology company is not entitled to insurance coverage by "operation of law" for certain environmental liabilities under CERCLA on policies issued by an insurance company to the prior owner of the contaminated site at issue. The company's operation of law argument fails. Adopting the company's notion that insurance automatically transfers by operation of law to any successor owners of the property simply by virtue of their becoming liable for its environmental liabilities would create an absurd regime in which an insurer who issued a general liability policy to the property owner many years ago automatically becomes the insurer for every single subsequent buyer of the property. No public policy reason exists for overriding the contracts that the insurance company and the previous property owner negotiated many years ago. The previous owner remains potentially subject to CERCLA liability for the remediation of the site. If the company has already paid for the cleanup, it has recourse against the previous owner for contribution.