A federal judge recently relied on a pollution exclusion to find
that Great American Insurance Company was not obligated to cover
losses associated with the unintended distribution of rock fines
into New Jersey's Spruce Run reservoir. In Great American Ins. Co. v. ACE
American Ins. Co., No. 4:18-CV-114-A (N.D. Tex. Jul. 10,
2018), the Northern District of Texas examined the scope of an
absolute pollution exclusion and found that it applied to bar
coverage, despite the fact that rock fines were natural particles
which were being maintained for subsequent use or sale.
The Policy
The subject policy was issued by Great American to U.S. Concrete
and provided commercial umbrella insurance coverage. Eastern
Concrete Materials, Inc.—a wholly-owned subsidiary of U.S.
Concrete—was one of more than 60 entities named as insureds
under the umbrella policy, which provided protection over and above
a commercial general liability policy issued by ACE American.
Payment and defense
