Case Interpreting ''Absolute Pollution Exclusion'' In Insurance Policies
In West American Insurance Co. v. Tufco Flooring East, Inc., 104 N.C. App. at 325, 409 S.E.2d at 700, the insured performed floor resurfacing in a Perdue chicken processing facility. Tufco, 104 N.C. App. at 314, 409 S.E.2d at 693.
Perdue subsequently brought a claim against the insured, alleging that during the floor resurfacing work, styrene fumes or vapors were released from the flooring material, contaminating chicken products being stored by Perdue in an adjacent cooler. Tufco, N. C. App. at 314, 409 S.E.2d at 693.
On appeal, the court considered whether the absolute pollution exclusion precluded coverage for Perdue's claims against the insured.
The court noted that the insured did not bring the vapors or fumes into the Perdue processing facility. Tufco, 104 N.C. App. at 322, 409 S.E.2d at 698.
Rather, the insured brought an unadulterated, pure raw material into the facility that was used for the normal business activity of resurfacing floors. Tufco, 104 N.C. App. at 322, 409 S.E.2d at 698.
The Tufco court held that the absolute pollution exclusion refers to unwanted waste material, not raw material brought upon the premises by the insured for the purpose of normal business activity which accidentally resulted in property damage" (Tufco, 104 N.C. App. at 322, 409 S.E.2d at 698), that the insured was in the business of installing industrial flooring, that it purchased its commercial liability policy to protect it from liability from the very type of activity at issue, and that its work was no secret to the insurance company. Tufco, 104 N.C. App. at 317, 409 S.E.2d at 697.
The Tufco court held that to allow the insurer to deny coverage for claims arising out of the insured's central business activity would render the policy useless to the insured, and, thus, the absolute pollution exclusion did not apply to bar coverage. Tufco, 104 N.C. App. at 318, 409 S.E.2d at 697, 698.