A manufacturing company is suing Liberty Mutual for $4 million after the insurer refused to pay for soil and water decontamination at an Illinois factory site, Insurance Business Magazine reported.
What's happening?
The Arnold Engineering Company states that Liberty Mutual won't honor insurance agreements from the 1970s and 1980s that are intended to cover the cost of cleaning work at a former magnet production site in Marengo, Illinois.
In 2008, state environmental officials discovered that industrial chemicals had contaminated the groundwater at the property and had also seeped into surrounding areas. People living nearby took Arnold to court.
Arnold made a deal with Illinois officials in 2016 to decontaminate the area. The company must supply drinking water in bottles to neighbors, connect homes to city water lines, analyze soil and water samples, and develop a decontamination strategy. These tasks will cost over $4 million.
Liberty Mutual claims contamination exemptions in the old agreements mean they don't need to pay, and that the insurance only applies to releases that were "sudden and accidental."
Why is the denial of pollution coverage concerning?
When insurers won't pay for decontamination work, poisoned locations can remain untreated for years.
Contaminated groundwater endangers drinking supplies and community health. Industrial chemicals from old factory locations can trigger cancer, harm organs, and cause developmental issues in kids.
The contamination at this Illinois location stems from decades of factory operations. Industrial cleaning chemicals, once common in manufacturing, stay in the earth and water for decades. These substances travel through underground water and can arrive at houses miles from their origin.
Without insurance money, companies may not have resources for adequate decontamination. This exposes neighborhoods to harmful substances while court fights continue. The contamination continues to spread, which may affect additional families and increase future cleanup costs.
What can I do about pollution coverage issues?
If you live near active or closed factory locations, check your well water every year. Many public health offices provide free or affordable tests for common factory contaminants.
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Never 👎 Research property backgrounds before you purchase a house. Question real estate professionals about previous factory operations and review state environmental records for contamination information. Your state environmental department keeps public files on contamination violations and cleanup locations.
Back tougher contamination regulations in your area. Call your local officials to express support for legislation that requires companies to carry sufficient insurance for environmental harm. Many states are reviewing legislation that prevents insurers from using outdated exemption language to avoid cleanup payments.
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