Needless to say, insurance companies and policy holders have rarely agreed on the proper interpretation of liability policies, even with pollution exclusion clauses, in the context of an environmental claim. Insurance companies have two primary duties under the terms of a typical liability policy. When policy holders receive. Initial insurance disputes, therefore, are invariably concerned with the insurance, companies' duty to defend. For the insured, obtaining a defense is no trivial matter.
Environmental litigation is expensive and complex.
Few insureds have sufficient resources to independently fund litigation of this type. The expenses associated with environmental litigation is also the reason insurance companies seek to limit their defense obligations. Enter the California Supreme Court. In two recent decisions, which landed on the insurance industry with the force of small atomic explosions, the Court reaffirmed in the broadest possible terms the rights of policy holders to be fully and fairly defended against environmental claims. The Court held that in order to trigger the duty to defend policy holders must only show a possibility of coverage under the insurance contract.