Wiley Rein LLP on General and Professional Liability Coverage for "Global Warming Claims"
Recent commentaries by policyholder advocates suggest that general and professional liability insurers soon will face an explosion of insurance coverage litigation from corporate policyholders seeking coverage for “global warming” liabilities. However, in light of current global warming claims and the coverage issues implicated by such claims, this broad assertion should not be accepted at face value.
The scientific community’s evolving understanding of global warming has led to an ever-growing public perception of how global warming interacts with naturally occurring catastrophic events such as hurricanes, tsunamis and droughts. As a result, insurers have begun to assess how the apparent link between greenhouse gases and global warming eventually may lead to corporate liabilities that could implicate general and professional liability insurance.
The current field of global warming claims includes several cases that have been dismissed on threshold justiciability grounds as presenting “political questions.” However, the United States Supreme Court’s decision in Massachusetts v. EPA, holding that CO2 and other greenhouse cases are “air pollutants” under the Clean Air Act could mark a shift in momentum. Recently, a case brought by a group of plaintiffs’ lawyers on behalf of an Alaskan village has alleged that energy companies should be responsible for the cost of relocating the village, which is endangered by shrinking levels of sea ice purportedly caused by global warming, which in turn is allegedly caused by the defendants’ contributions of greenhouse gases to the atmosphere.
Although global warming claims are a new development, the coverage issues facing general and professional liability insurers when corporate policyholders seek coverage for such claims should be familiar territory. Closer examination of these coverage issues provides a basis for concluding that global warming claims are more likely to resemble the vastly over hyped “Y2K” problem, in terms of real-world exposure, than “the next asbestos” confronting the insurance industry.