ELR Citation: ELR 20289
No(s). 07-10515 (D. Mass. Dec 1, 2009)

A district court held that an insurance company has a duty to defend the former owners and operators of a nuclear waste facility in EPA's CERCLA action against them for remediation costs associated with the site. The policy contained an endorsement that excluded coverage for environmental cleanup costs. However, the endorsement was not properly issued because it did not strictly comply with the notice requirements set forth in Mass. Gen. Laws ch. 175, §111A. The endorsement, therefore, does not apply. And although EPA's demand letters do not directly allege any off-site migration, under Massachusetts law, the duty to defend arises even if there is only a possibility of an insured’s being found liable for a claim. Here, the only impediments to liability would arise if the state decides that the threat of harm to adjacent property is insufficient in and of itself to trigger liability and if the EPA concludes that groundwater migration of nuclear and other contaminants has not in fact occurred. Yet, EPA has taken the position that such migration has likely already taken place. The insurer, therefore, has a duty to defend the owners and operators unless or until a competent tribunal enters a conclusive finding that no migration of contaminants from the site has occurred or is imminent.