Devoted to the Insurance industry and all thing related

Dig out those old liability policies and dust them off because insurers might be saddled with a huge financial burden following a U.S. Supreme Court decision (PDF of decision) about the state of Massachusetts.  The decision “allows states and municipalities to sue companies over greenhouse gas emissions” according to an article on the National Underwriter website.

James Davis, managing partner of the Chicago office of Anderson Kill & Olick “advises insurers and their policyholder companies to try and negotiate an agreement with governments on global warming issues to avoid a wave of major mass torts.”  

Davis goes on to say:

“Under common law in most states a policyholder has a reasonable expectation of coverage for liabilities resulting from their normal business operations and must be granted that coverage.  If the releasing of greenhouse gases were a part of those operations, and since greenhouse gases were not regulated as emissions during the coverage period, policyholder companies can reasonably expect that their coverage will apply regardless of the pollution exclusion.”

Sounds like some insurers are going to need to cozy up with the EPA and start to “Go Green”.  If there is any industry that can survive this potential disaster, it’s the insurance industry.