This should be no surprise to my dear readers!
The Wisconsin Supreme court has recently ruled that manure contamination is not a covered loss under the standard CGL policy. In Wilson Mutual Ins. Co. v. Falk, 2014 WI 136 (Wis. 2014), the court ruled that manure runoff, which had contaminated several nearby drinking water wells, was a pollutant and therefore excluded from coverage.
The Wilson policy covered losses for property damages and bodily injury. It did not cover losses for the “actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants’ into or upon land, water or air.” “Pollutant” was defined to be a solid, liquid or gaseous irritant or contaminant, including “waste.” Materials that are recycled, reclaimed or reconsidered could be considered “waste” under the Wilson policy, too.
My dear readers KNOW that this language is the standard absolute pollution exclusion clause adopted by the ISO. We have discussed this subject multiple times in this Blog. The exclusion is found in most all CGL policies. Many courts have interpreted this language to exclude all pollution – no matter how clever an insured tries to manipulate the language. It was the explicit intent of the industry to bar coverage for pollution when it adopted this absolute clause in the early 1990’s.
To the contrary, the insured in Wilson argued that a reasonable insured would not consider manure to be a pollutant when taking into account the context and environment in which the injury occurred. The manure in this case was being used on farm fields to enhance crop growth. The insured argued that a reasonable farmer would consider manure to be a benefit, not an irritant or contaminant. The Wisconsin Court of Appeals initially agreed with this assessment of the policy language.
But the Wisconsin Supreme Court did not. That court focused its inquiry not on the use of the manure at the point of application. Rather it looked at the nature of the manure at the point of damage – what was the nature of the manure at the time it seeped underground and into drinking water wells? When looking at the issue in this manner, the manure was indeed an irritant and a contaminant. The manure fell well within the common language definition of those words. Well water – when infected by manure- is clearly not drinkable. It is contaminated. There is no coverage because such contamination is expressly excluded. Done and done.
- Manure is a contaminant under the standard CGL policy exclusion.
- Losses due to manure contamination are not covered and are excluded.
- An absolute pollution exclusion means just that: pollution is not covered under the policy.