This article originally appeared in Anderson Kill's Energy & Chemical Insurance Advisor (Autumn 2007).
With all the increased media attention on the effects of greenhouse gases — thank you, Al Gore! — it should be no surprise that lawsuits alleging damages arising out of greenhouse gases (“GHGs”) have already begun to be filed. Given that development, it is likely just a matter of time before some (if not all) insurance companies seek to argue that lawsuits involving GHGs are excluded from coverage under CGL policies by provisions such as the so-called “absolute pollution exclusion.” Under the common law of most states, however, policyholders with a reasonable expectation of coverage for liabilities arising out their normal business operations must be granted that coverage. Put differently, if a company’s normal business operations involve the release of GHGs, and GHGs are not regulated emissions, then that company can reasonably expect its insurance policy will cover lawsuits relating to GHGs.