Texas Says EPA Administrative Actions Under CERCLA Trigger Duty To Defend

As any company facing EPA administrative action under CERCLA knows, the financial risk and defense costs associated with those proceedings can be the same as the risk and costs of an EPA lawsuit under CERCLA. But insurers have argued that administrative actions are very different from suits under standard CGL policies. Those policies, insurers argue, provide defense coverage to costs related to "suits," not administrative actions. Joining a clear majority of state courts, the Texas Supreme Court recently rejected this narrow interpretation of the duty to defend in McGinnes Indus. Maint. Corp. v. The Phoenix Ins. Co., holding that a CGL insurer must provide a defense in CERCLA administrative actions.