New insurance regulations in the State of Washington that took effect in July will change significantly the way insurance companies are required to handle environmental liability
insurance coverage claims. The regulations are aimed at eliminating several barriers raised by the insurance industry to environmental claims and making it easier for policyholders in Washington to obtain the benefits of their general liability insurance coverage for environmental cleanups. The new rules could divert millions of dollars currently spent on litigation to environmental cleanup in Washington and elsewhere.
Washington State Insurance Commissioner Deborah Senn explained that one reason for the new rules is that policyholders have been forced to engage in time-consuming, expensive litigation to obtain coverage under their general liability insurance policies. This has hurt smaller policyholders in particular, as they are unable financially to pursue such litigation while also addressing federal and state environmental site cleanup and recovery requirements.