Opinion ID: 1506273
Heading Depth: 1
Heading Rank: 4

Heading: Whether exclusion (f) applies and therefore precludes coverage

Text: The ANI Facility and S & T policies contain what are referred to as Facility Exclusions that preclude coverage for property damage to Maxey Flats. ANI's Facility Form Exclusion (f) provides that coverage does not apply to property damage to any property at the location designated in [Maxey Flats], other than aircraft, watercraft or vehicles licensed for highway use, provided such aircraft, watercraft or vehicles are not used in connection with operation of the facility. The ANI S & T Forms NS-230 and NS-266, at Exclusion f, state that those policies do not apply to property damage to any property at any nuclear facility or any property threat arising out of the possession, handling, use, storage or disposal of nuclear material at such nuclear facility.... Kentucky law mandates that exclusions in insurance policies should be narrowly construed as to effectuate insurance coverage. See Eyler v. Nationwide Mut. Fire Ins. Co., 824 S.W.2d 855, 859 (Ky.1992). We find in accordance with the Court of Appeal's opinion that the weight of authority favors coverage under liability policies for remediation expenses when the primary intent is to prevent additional harm to the property of others or to public waters. See, e.g., Intel Corporation v. Hartford Acc. & Indem. Co., 952 F.2d 1551 (9th Cir.1991); Gerrish Corp. v. Universal Underwriters Ins. Co., 947 F.2d 1023 (2d Cir.1991). We recognize also that common sense would mandate in this scenario the most effective method of preventing additional harm to the property of others or to public waters would be to target the site of the harm, though it may be on-site, to prevent further contamination via run off to off-site locations. Plus, we find the parties stipulation that only 2.6% of the total response costs were designed to clean up damage confined to the insured facility determinative of our decision whether exclusion (f) applies to exclude ANI's liability for the insureds' response costs. Accordingly, we affirm the lower court's finding that only 2.6% of the response costs are subject to exclusion (f), a ruling undisturbed by the Court of Appeal's opinion.