Aerojet-General Corp. v. Superior Court

In Aerojet-General Corp. v. Superior Court (1989) 211 Cal.App.3d 216, the state and the United States had sued the insureds to recover environmental response costs they had incurred. (Id. at p. 221.) The court held that at least some of the response costs were covered under third party liability policies, because they were "damages" within the meaning of the insuring clauses of the policies. (Id. at pp. 225-232.) In the course of its discussion, it cited and quoted Globe. (Aerojet-General Corp., at pp. 226-227.) However, the court also specifically held that response costs incurred "to prevent future pollution of a type which has not yet occurred, or to prevent pollution from a source which has not yet caused pollution" would not be covered. (Id. at p. 237.) It explained: "These costs would not be causally related to property damage and would therefore not be covered as 'damages' under the policies." (Ibid.) Thus, it essentially held that at least some costs of mitigating a loss are not recoverable under a third party liability policy.