Another (Insurer) Bites The Dust: Virginia District Court Rejects Narrow Reading of Pollution Exclusion

In a victory for policyholders, and an honorable mention for Merriam-Webster’s Dictionary, a federal judge in Virginia ruled that the dispersal of concrete dust that damaged inventory stored in an aircraft part distributor’s warehouse was a pollutant, as defined by the policy, but that it also constituted “smoke” as that term was defined in the dictionary, thereby implicating an exception to the policy’s pollution exclusion.  The Court then granted summary judgment for the policyholder, who had suffered a $3.2 million loss.[1] In Allied Property and Casualty Insurance Company v. Zenith Aviation, Inc., the policyholder, Zenith, an aircraft parts distributor, hired a construction company to install an elevator in its distribution warehouse. While digging the pit for the elevator, concrete dust caused by the contractor’s improper use of a wet saw damaged Zenith’s inventory of airplane parts and an electronic retrieval system. Zenith…

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