June 05, 2017 Articles

Washington Supreme Court Limits Application of Absolute Pollution Exclusion

Policyholders must consider several interrelated issues when faced with the potential application of a pollution exclusion

by Michael B. Rush

In April, the Washington Supreme Court issued a ruling narrowing the application of an absolute pollution exclusion in a case involving a carbon monoxide leak. The court’s decision in Zhaoyun Xia v. ProBuilders Specialty Ins. Co. RRG, No. 92436-8, 2017 WL 1532219 (Wash. April 27, 2017), primarily addressed the applicability of a pollution exclusion when the cause of the loss was a covered occurrence under a different provision. Applying the “efficient proximate cause” rule, the court ultimately concluded that the loss was covered, and further concluded that the insurer acted in bad faith by denying coverage.

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