Climate Change and the Duty to Defend

Risk Management

PUBLISHED ON: March 11, 2011

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A crucial issue facing today’s corporate policyholders is whether the liability insurance policies they already purchased will be available to defend against lawsuits alleging liability based on climate change theories. These suits are proliferating and, for now, at least some federal courts have held that viable “nuisance tort” claims exist. In Connecticut v. American Electric Power Co., Inc., recently taken up by the U.S. Supreme Court, the U.S. Second Circuit in 2009 rejected the political question doctrine and allowed nuisance tort claims filed by various states against major coal-burning electric utilities to proceed. Presently, U.S. Circuit Courts of Appeal are split and the issue of whether nuisance tort claims should be allowed to proceed is ripe for U.S. Supreme Court review.