U.S. Circuit Court Finds Limits to Indiana’s Kiger Decision in Federated’s Unambiguous Policy Language

By David A. O’Neill, J.D., Director of Investigations, Policy Find

The question of how broadly the Indiana Supreme Court’s ruling in American States Insurance Company v. Kiger, 662 N.E. 2d 945 (Ind. 1996) can be interpreted was further decided on March 25, 2010 when the United States Court of Appeals, Seventh Circuit reached a decision in the West Bend Mutual Insurance Company v. U.S. Fidelity and Guaranty Company case.  This appellate decision is a caution to those owners and operators of retail gasoline service stations, who have been waiting to have their properties tested for pollutants in reliance on the effect of the Kiger ruling.  They will now be carefully reviewing the pollution exclusionary and definitions clauses in their policies to determine whether the Kiger or West Bend rules apply to their situations.

 In its published opinion, the Seventh Circuit explained its decision to affirm the U.S. District Court’s interpretation of a Federated Mutual Insurance Company umbrella liability policy which had been found to exclude coverage for pollution of neighboring property occasioned by leaking underground gasoline storage tanks. Continue reading “U.S. Circuit Court Finds Limits to Indiana’s Kiger Decision in Federated’s Unambiguous Policy Language”