Addressing Pollution Exclusion In Va.

Law360, New York (May 9, 2012, 1:05 PM EDT) -- On April 20, 2012, the Supreme Court of Virginia, applying Virginia law, held that pollution exclusion endorsements in first-party property policies barred coverage for the insured's product losses caused by contamination of infant formula resulting from a manufacturing mishap. Policyholder advocates had unsuccessfully sought to limit the clauses to "traditional" outdoor pollution, i.e., hazardous waste contamination.

In 2009, the policyholder — a manufacturer of infant formula — suffered loss when water filters in the formula heating system disintegrated and contaminated numerous batches of formula with melamine....
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