Is 'Absolute Pollution Exclusion' Restricted to Only Those Hazards Associated With Environmental Pollution ?
In American States Insurance Company v. Koloms, 177 Ill. 2d 473, 476, 687 N.E.2d 72, 227 Ill. Dec. 149 (1997), our supreme court wrestled with the seemingly limitless scope of what is commonly known as an "absolute pollution exclusion."
In Koloms, carbon monoxide was released from a faulty furnace located in a two-story commercial building, saturating the air inside the building. Koloms, 177 Ill. 2d at 476.
As a result, those present on the premises became ill and filed suit. Koloms, 177 Ill. 2d at 476.
The insurer of the building denied the insured's tendered defense, arguing that, because carbon monoxide was a pollutant, there was no coverage under the policy's absolute pollution exclusion. Koloms, 177 Ill. 2d at 476.
On appeal, the insured argued that the insurer's proffered interpretation of the "absolute pollution. exclusion" was too broad. Koloms, 177 Ill. 2d at 483-84.
Specifically, the insured contended that, based upon the "historical purpose of the exclusion," the scope of the clause was limited to "large scale, environmental contamination" and that it was "intended solely to protect insurers from having to defend and indemnify insureds in connection with governmental clean-up costs." Koloms, 177 Ill. 2d at 483-84.
The insured argued that "because this case involves personal injuries caused by exposure to materials which do not constitute 'pollution' in the traditional sense of the word, the exclusion does not apply." Koloms, 177 Ill. 2d at 484.
The Koloms court first noted widespread criticism of the insurance industry's attempt to broadly define what constitutes a "pollutant." See Koloms, 177 Ill. 2d at 484.
The court cited two examples where a broad reading of that term would lead to the "absurd" result of noncoverage:
(1) " 'bodily injuries suffered by one who slips and falls on the spilled contents of a bottle of Draino' "
(2) " 'bodily injury caused by an allergic reaction to chlorine in a public pool.' " Koloms, 177 Ill. 2d at 484, quoting Pipefitters, 976 F.2d at 1043.
After recognizing that, "despite the abundance of opinions construing the exclusion, courts have not reached a clear consensus as to its proper interpretation" (Koloms, 177 Ill. 2d at 485) and stating that it was "troubled" by "an overbreadth in the language of the exclusion as well as the manifestation of an ambiguity which results when the exclusion is applied to cases which have nothing to do with 'pollution' in the conventional, or ordinary, sense of the word" (Koloms, 177 Ill. 2d at 488), the court "restricted the exclusion's otherwise potentially limitless application to only those hazards traditionally associated with environmental pollution" (Koloms, 177 Ill. 2d at 489).