Pollution Exclusion Applicable When Underlying Suit Alleges Exposure To Migrating Vapors

The U.S. District Court for the Southern District of Texas granted summary judgment last week to an insurer finding it had no duty to defend a case brought against its insured for damages allegedly caused by vapors emitted from spray polyurethane foam (“SPF”) insulation.  The insurer had issued a commercial general liability policy to the manufacturer of the insulation.  The policies required the insurer to defend against underlying suits seeking damages for bodily injury or property damage caused by the manufacturer’s products, but excluded coverage for damages for bodily injury or property damage that “would not have occurred in whole or in part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time.”  The policies defined “pollutants” as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, … chemicals … and waste.”

In the underlying litigation, the plaintiff homeowners alleged that the area of their home undergoing renovation, where the insulation was installed, had not been properly sealed off, which permitted the vapors emitted from the insulation to cause injuries in the other parts of their home.  The court concluded that the pollution exclusion applied and that the insurer’s duty to defend was not triggered.