The Troublesome Trend Of D&O, E&O Pollution Exclusions

In light of the emerging risks associated with climate change and related environmental liabilities, the proliferation of pollution exclusions in directors and officers (D&O) and errors and omissions (E&O) insurance policies is an alarming trend.

The insurance industry’s long history of efforts to expand the scope of these exclusions adds cause for concern, because virtually any substance can be an irritant or pollutant in sufficient concentrations or under specific circumstances. The highest courts of many states recognize that this can lead to absurd results and have refused to allow overboard application of "absolute" or "total" pollution exclusions.