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Nascimento v. Preferred Mut. Ins. Co.

ELR Citation: 38 ELR 20022
Nos. No. 07-1792, (1st Cir., 01/18/2008)

The First Circuit held that under Massachusetts law, an insurance company has no contractual obligation to defend or indemnify an individual in an environmental liability suit brought against him by his neighbors for soil contamination stemming from a leaking underground storage tank (UST). The total pollution exclusion in the insurance policy bars coverage of all of the neighbors' claims. Prior case law holds that once oil leaks, it is a pollutant. And once the oil becomes a pollutant, the total pollution exclusion of an insurance policy is triggered, thereby barring coverage for both remediation and nonremediation claims. In this case, the home heating oil leaked from the UST that the individual continuously used. The leak caused the pollution damage for which the neighbors seek reimbursement. Therefore, the total pollution exclusion was triggered, and the insurance company has no duty to defend the individual in the underlying suit.