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Keystone Consol. Indus., Inc. v. Employers Ins. Co. of Wausau

ELR Citation: 36 ELR 20154
Nos. No. 05-3412, (7th Cir., 08/03/2006)

The court reverses and remands a grant of summary judgment in a manufacturer's suit for indemnification arising out of environmental cleanup costs at four sites in Illinois and Indiana. Under Illinois law, the duty to indemnify may arise even in the absence of a lawsuit triggering the duty to defend. Moreover, the language of the insurance policy, which references "claims or judgments," further supports the conclusion that the insurer has a duty to reimburse the manufacturer for losses it incurs directly or to pay sums that it becomes legally obligated to pay separate from and independent of the insurer's duty to defend. In addressing whether the manufacturer undertook its cleanup measures gratuitously or in response to a demand by an enforcement agency, the court concludes that the manufacturer only needs to have acted in response to a claim in order to trigger the insurer's duty to indemnify. Mere statutory liability is insufficient to trigger an insured's legal obligation to remediate.