Insurance/Reinsurance and Litigation Alert: California Supreme Court Holds That Escape of Pollutants - Not Deposit - is the Relevant Discharge for Application of the Pollution Exclusion....


In an important decision further clarifying the application of the “sudden and accidental” pollution exclusion and the absolute pollution exclusion as it applies to pollution of a “watercourse or body of water,” the California Supreme Court recently held in State of California v. Allstate Insurance Company, et al.1 that the pollution exclusion applies to the escape of pollutants from the site and not to the initial deposit of wastes at the site.

The case arises from the State of California’s ("the State") efforts to obtain insurance coverage for property damage liability as a result of discharges from the well known “Stringfellow Acid Pits,” a State-operated class I hazardous waste disposal facility in Riverside County.

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