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Southern Pilot Insurance Co. v. Matthews Auto Repair, Inc.

ELR Citation: 47 ELR 20160
Nos. 1:17-cv-01207-JMS-DML, (S.D. Ind., 11/29/2017) (Magnus-Stinson, J.)

A district court held that an insurance company cannot back out of an insurance policy because a policyholder entered into a voluntary environmental cleanup agreement. The policyholder agreed to sell its land and allowed the buyer to do an environmental assessment. When contamination was discovered, the policyholder entered into a voluntary agreement with the state to remediate the site, and then informed its insurance company requesting indemnification. The insurance company denied the request, claiming that entering into a binding agreement violated the policy and relieved the insurance company of liability. The court disagreed, holding that the policyholder did not enter into a binding agreement as it may withdraw from the agreement without penalty.