When Neil and Patricia Whitney were forced to move out because their home was sprayed for bed bugs with a banned pesticide, they received a $450,000 settlement. Now, they’re after their insurance company.
The Whitneys claim Vermont Mutual Insurance Co. has refused to cover their homeowners policy after their Rutland, Vt. home was made uninhabitable when it was sprayed for bed bugs with a banned pesticide in April 2013.
According to the insurer, the denied claim traces back to the contentious pollution exclusion in homeowners’ policies, which doesn’t cover pollution in homes defined as “the discharge, dispersal, seepage, migration, release or escape of pollutants.”
In their lawsuit, the Whitneys reject the exclusion because “it was intended primarily to exclude coverage for traditional environmental pollution rather than all injuries from toxic substances.”
The $450,000 settlement was paid out by the state of Vermont.
The pollution exclusion, and even the definition of ‘pollution,’ is a hotly contested issue in the insurance industry. While most cases center on the exclusion in the commercial general liability (CGL) policy, most homeowners’ policies also exempt pollution events.
Courts, however, have been frustratingly divided on the issue with some jurisdictions interpreting the pollution definition more broadly than others.
