ELR Citation: ELR 20096
No(s). H024142 (Cal. App. 6th Dist. May 26, 2006)

The court affirms a lower court decision that under California law, an insurance company need not provide coverage for the costs property owners incurred responding to suspected soil and groundwater pollution. A state agency ordered the property owners to test their property after they were suspected of being the source of the contamination. The agency ultimately determined that the property owners were not the source, and it closed its investigation. The owners then sought reimbursement from its insurer. The owners' comprehensive commercial general liability policy, however, contains an absolute pollution exclusion that is non-specific and all-encompassing. And the property owners' excess/umbrella insurance policy only provides coverage for damages, which, under state law, means a court-ordered loss, not costs incurred pursuant to an administrative order.