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Apana v. TIG Ins. Co.

ELR Citation: 37 ELR 20231
Nos. No. 06-00653JMS/LEK, (D. Haw., 08/16/2007)

A district court held that an insurance company has a duty to defend, but not indemnify, a plumber and his employer in an underlying action concerning damages suffered by an individual who inhaled noxious fumes after the plumber poured chemicals down a clogged drain. Under Hawaiian case law, an insurer's obligation to defend is broader than the duty to pay claims and arises wherever there is the mere potential for coverage. But there is a deep split among state courts regarding whether a total pollution exclusion precludes coverage in cases of personal injury resulting from relatively isolated inhalation or exposure to pollutants or whether such clauses only preclude coverage in cases of "traditional" environmental pollution. Hawaii has yet to rule on the issue. Because the underlying complaint raised the possibility that the plumber and his employer were entitled to indemnification, the court ruled that the insurance company has a duty to defend. However, based on the terms of the policy, the court concluded that the total pollution exclusion clause excludes coverage for bodily injuries resulting from the contamination of the air. The insurance company, therefore, has no duty to indemnify the plumber and his employer for the individual's injuries.