Washington Court Rules Insurer’s Duty to Defend Environmental Liability is Triggered by Agency’s Explicit or Implicit Threat of Immediate and Severe Consequences
A party faced with strict liability under the Washington Model Toxics Control Act (MTCA) for the costs of cleaning up environmental contamination often has insurance that might apply, but a lingering question has been at what point is the party’s insurer obligated to defend? The Washington Court of Appeals has now ruled that a letter from the Department of Ecology (Ecology) that merely acknowledges receipt of a voluntary report of contamination and intent to remediate is insufficient to trigger the insurer’s duty to defend. As foreshadowed 20 years ago by the Washington State Supreme Court in Weyerhaeuser Co. v. Aetna Cas. & Sur. Co., the Court of Appeals has now ruled that the duty to defend is triggered only when there is an explicit or implicit threat of immediate and severe consequences because of the contamination. The court, however, did not explain what language would constitute an “explicit or implicit” threat.
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