Insurance Coverage for RCRA Corrective Action Costs

Federal and state environmental agencies have an array of weapons available to compel companies to investigate and clean up contamination. While the specific law chosen as legal authority generally will not alter the agency’s ability to enforce its goal of cleaning up property damage, the choice may have a significant impact on the company’s ability to recover insurance for the enforcement action and resulting liabilities. Policyholders need to beaware of the insurance issues relating to the different laws imposing environmental liabilities,especially when the policyholder has input in determining the legal authority that will govern its investigation and remediation. This article addresses how the policyholder’s right to insurance coverage may be affected by the different environmental laws at issue, with particular emphasis on the coverage available for enforcement actions pursuant to the Resource Conservation and Recovery Act (“RCRA”), and analyses of the limited case law pertaining to insurance coverage for RCRA liability.