The Georgia Supreme Court recently held in Georgia Farm Bureau Mutual Insurance Co. v. Smith et al., No. S15G1177 (Ga. March 21, 2016), that lead paint unambiguously qualifies as a pollutant and that personal injuries from ingesting the paint were excluded from coverage by the plain language of the commercial general liability (CGL) policy’s absolute pollution clause.
In this case, Amy Smith, individually and as next friend of her daughter, sued her landlord, Bobby Chupp, for injuries her daughter sustained after ingesting lead paint. The rental home was insured by Chupp under a CGL policy issued by Georgia Farm Bureau Mutual insurance Company. Georgia Farm Bureau argued the policy’s absolute pollution exclusion clause excepted coverage.
Pollution exclusion clauses were originally developed by insurers as a response to environmental regulations enacted by Congress in the 60’s and 70’s and were directed specifically at environmental pollutants. These clauses were later broadened to exclude pollution beyond the natural environment to pollutants originating from places such as the rental property at issue in this case. The broadened clauses are known as “absolute exclusion clauses.”
Georgia courts have repeatedly upheld such clauses and found they extend beyond traditional environmental pollution to include for instance, carbon monoxide leaking from a furnace in a rental home, asbestos released from floor tiles during renovation, and smoke emanating from the premises. Importantly, Georgia courts enforced absolute pollution exclusion clauses without requiring the specific pollutant to be explicitly identified in the policy.
In the Smith case, the Georgia Supreme Court looked to the plain language of the policy and found lead paint to be unambiguously qualified as a pollutant as defined in the policy, even though it was not specifically named in the policy. The policy language upheld by the Georgia Supreme Court and which should be kept in mind when drafting absolute pollution exclusion clauses is as follows:
This insurance does not apply to:
(f) Pollution (1) “Bodily injury” or “property damage” arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants: (a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured
Pollution was defined as “any solid, liquid, gaseous or thermal, irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.”
The Smith case was a big win for Georgia insurers and further fortified that the plain language of the policy controls policy coverage.