COVID-19 Is Not Covered By Pollution Insurance, Judge Rules

By Daphne Zhang
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Law360 (December 4, 2020, 10:05 PM EST) -- An Arizona federal judge freed Chubb unit Illinois Union Insurance Co. from having to cover a resort's virus losses, finding Friday that the carrier's "premises pollution liability" policy only covers environmental pollution but not the COVID-19 outbreak.

U.S. District Judge G. Murray Snow dismissed London Bridge Resort LLC's suit against the insurer, ruling that the resort cannot recover anything under its policy because COVID-19 does not fall within the policy's "pollution condition" definition.

COVID-19 is a type of virus and does not constitute traditional environmental pollution, the judge said. "A virus outbreak does not closely resemble the enumerated examples provided in the policy's definition."

Just like property policies' pollution exclusions do not preclude "all contact with substances that can be classified as pollutants" but only bar environmental contaminants, the judge said, the resort's pollution policy only covers pollutants "commonly thought of as environmental pollution" but not a virus crisis.

"Although no Arizona court has addressed coverage under a pollution liability policy," the judge said, "other courts have extended the principles in pollution exclusion clause cases to those involving pollution liability policies."

The resort based in Lake Havasu City, Arizona, has alleged that it suffered severe revenue loss due to the pandemic and sought coverage over the insurer's premises pollution liability insurance policy.

The resort has argued that COVID-19 causes traditional environmental pollution because different government agencies have defined "virus" as certain contaminants, and there have been rulings holding that property policies' pollution exclusions can preclude COVID-19 since the virus is a kind of pollutant.

Judge Snow disagreed on Friday.

"A virus being considered a 'contaminant' or 'pollutant' in certain instances does not render a COVID-19 outbreak 'traditional environmental pollution,'" he stressed.

"The court does not find, and the parties do not provide, case law finding that virus outbreaks are considered traditional environmental pollution," he added.

Representatives for the parties could not be immediately reached for comment on Friday. 

The resort is represented by Matthew Thomas Anderson of Matt Anderson Law PLLC.

The insurer is represented by Amy Lynn Stein and Amy Michelle Samberg of Foran Glennon Palandech Ponzi & Rudloff PC.

The case is London Bridge Resort LLC v. Illinois Union Insurance Company Incorporated, case number CV-20-08109, in the US District Court for the District of Arizona.

--Editing by Emily Kokoll.

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Case Information

Case Title

London Bridge Resort LLC v. Illinois Union Insurance Company Incorporated

Case Number




Nature of Suit

Contract: Insurance


G Murray Snow

Date Filed

May 08, 2020

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