Opinion ID: 1506273
Heading Depth: 1
Heading Rank: 5

Heading: Threat of damage.

Text: The site measures, i.e., improvement of the site's containment features, were performed to alleviate the threat to human health and the environment posed by the site in the future. ROD Responsiveness Summary 25. Obviously, the exclusion in the S & T Form policy of any property threat excludes coverage for the cost of implementing the recommended site measures. Furthermore, threatened harm is not within the coverage of either policy. State v. Signo Trading Int'l, Inc., 130 N.J. 51, 612 A.2d 932, 938 (1992) (The policy's definition of property damage does not encompass `threatened harm' even if that threat is `imminent' and `immediate.'). In W.M. Schlosser Co., Inc. v. Insurance Co. of North America, 325 Md. 301, 600 A.2d 836 (1992), the insured made a claim for the cost of work done on his own property to prevent possible future damage to adjoining property. The insurance contract involved in this case is a Contractor's General Liability Policy. By its clear and unambiguous language, it is intended to protect the insured against claims made by others for damages the insured has a legal responsibility to pay. It is not an all risks or builder's risk policy. No claims were made by others as a result of any personal injury or property damage. Moreover, there was no occurrence within the meaning of the policy that caused damage to the persons or property of others. The action taken by Schlosser was intended to prevent the type of harm the policy would have covered, and no such harm in fact resulted. Id. at 838-39. See also E.I. du Pont de Nemours & Co. v. Allstate Ins. Co., 686 A.2d 152, 157 (Del.1996) (Costs for remedial measures taken on the insured's property to prevent third party property damage are precluded from coverage under the operation of the owned property clause.); Weyerhaeuser Co. v. Aetna Cas. & Sur. Co., 123 Wash.2d 891, 874 P.2d 142, 150 (1994) (en banc) ([P]reventive measures taken before pollution has occurred are not costs incurred because of property damage.) (internal citation and quotation omitted). The majority opinion's reliance on Intel Corp. v. Hartford Accident & Indemnity Co., 952 F.2d 1551 (9th Cir.1991), and Gerrish Corp. v. Universal Underwriters Insurance Co., 947 F.2d 1023 (2nd Cir. 1991), is misplaced. Those cases only exemplify a narrow exception to the general rule that is applied by some jurisdictions when pollutants from the insured property have already damaged adjacent properties, thus triggering the third-party liability coverage of the insured's policy. In that circumstance, the liability insurer may be required to pay damages not only for the damage to the adjacent owner's property but also for measures required to mitigate additional damage from the same cause. Intel, 952 F.2d at 1566 ([I]t would seem strangely incongruous to the insured that his policy would cover him for damages to tangible property destroyed through his negligence in allowing a fire to escape but not for sums incurred in mitigating such damages by suppressing the fire.) (quoting Globe Indem. Co. v. People, 43 Cal. App.3d 745, 118 Cal.Rptr. 75, 79 (1974) (internal citations and quotations omitted)); Gerrish, 947 F.2d at 1030-31. See also Western World Ins. Co. v. Dana, 765 F.Supp. 1011, 1015 (E.D.Cal.1991) (Mitigation damages are only available to mitigate against the further occurrence of an insured loss. Costs incurred to remedy the soil contamination are not recoverable mitigation costs because the damage was confined to property owned by the insured and therefore did not constitute an insured loss.) (internal citation and quotation omitted); City of Laguna Beach v. Mead Reinsurance Corp., 226 Cal.App.3d 822, 276 Cal.Rptr. 438 (1990) (Necessary to a recovery ... is the existence of an insured loss. ); E.I. du Pont, 686 A.2d at 157 ([T]he plain meaning of the language contained in the owned property exception and the purpose of liability policies in general, both require the result that coverage not be provided for measures taken on an insured's property unless it is in response to damage to third party property.); Signo Trading, 612 A.2d at 939 ([T]his case does not fall within the narrow exception allowing recovery for the cost of measures intended to prevent imminent or immediate future damage when a present injury has already been demonstrated.). The policies require proof of actual harm to third-party property in order to `eliminate[] any risk that insurance companies will be called upon to pay the ordinary costs of compliance with agency regulations.' Yale Univ., 224 F.Supp.2d at 408 (quoting Metex Corp. v. Fed. Ins. Co., 290 N.J.Super. 95, 675 A.2d 220, 228 (1996)).