Defining Occurrence – When Policy Definitions Do Not Apply To All Coverages
September 24, 2020
In policies without a specific bacteria or virus exclusion, the pollution exclusion may apply to exclude coverage for claims for bodily injury resulting from an occurrence involving bacteria or viral “contaminants.” The Florida Supreme Court has not yet considered whether viruses and bacteria fall within the definition of a pollutant under the Absolute or Total Pollution Exclusions. However, unlike some jurisdictions, under Florida law, the pollution exclusion is not limited to traditional environmental or industrial pollutants.1
Applying Florida law, a federal district court in the Southern District of Florida held in 2009 that the insurer did not have a duty to defend against a claim for injury resulting from a virus. In First Specialty Insurance Corp. v. GRS Management Associates, Inc.,2 First Specialty Insurance Corporation brought a lawsuit against a residential community homeowner’s association and the property management company that managed the association’s property, including the swimming pool. In the underlying state court case, the plaintiff claimed that he contracted a viral infection from contaminants within the water of the community swimming pool, and that according to an expert toxicologist’s report, the plaintiff contracted the Coxsackie virus as a result of ingesting swimming pool water in the community pool. The insurance policies at issue contained Total Pollution Exclusion Endorsements, which defined “pollutant” the same as in the Absolute Pollution Exclusion:
“Pollutants” mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.
The district court held that pursuant to the plain language of the policy, the meaning of the term pollutant includes contaminants and microbes. Accordingly, the court found that the pollution exclusion of the policies unambiguously applied to the viral contaminant allegedly present in the swimming pool.
The Eleventh Circuit has also considered, to a certain extent, whether injury resulting from bacteria is excluded by the pollution exclusion. In Westport Insurance Corp. v. VN Hotel Group, LLC, the Eleventh Circuit, applying Florida law, held that “the pollutant exclusion does not exclude from coverage injury resulting from the legionella bacteria.”3 The court was “persuaded” by the fact that the policy at issue also contained a fungi/bacteria exclusion, and determined that interpreting the pollution exclusion to apply to bacteria would render the fungi/bacteria exclusion meaningless.4 The court relied on the principle of policy construction that requires the policy to be read as a whole, “endeavoring to give every provision its full meaning and operative effect.” The Eleventh Circuit did not, however, expressly approve or disapprove of the district court’s finding that Legionella bacteria are not “pollutants” as defined by the policy.5
The federal district courts in Florida are split regarding the extent to which bacteria qualifies as a pollutant:
And, a number of federal district courts applying Florida law have found that similar pollution exclusions encompass “contaminants” in the form of microbes and other biological contaminants:
Where the policy at issue does not have an exclusion specifically aimed at viruses or bacteria, claims for injuries resulting from viruses or bacteria should still be excluded pursuant to a pollution exclusion. Whether such an exclusion is applicable will ultimately turn on whether a court finds that the definition of “pollutant” includes viruses or bacteria, which, as demonstrated by the split in the district courts, likely depends on whether the court determines that the virus or bacteria constitutes a “solid” within the definition of “pollutant.6
1 Deni Assocs. of Fla., Inc. v. State Farm Fire & Cas. Ins. Co., 711 So. 2d 1135, 1138 (Fla. 1998).
2 No. 08-81356-CIV, 2009 WL 2524613, at *5 (S.D. Fla. Aug. 17, 2009).
3 513 F. App’x 927, 929 (11th Cir. 2013).
4 Id. (“Because the Policy includes a separate exclusion provision for bacteria, the legionella bacteria cannot be considered a pollutant under the terms of the Policy.”).
5 See Westport Ins. Corp. v. VN Hotel Grp., LLC, 761 F. Supp. 2d 1337, 1344 (M.D. Fla. 2010), aff’d, 513 F. App’x 927 (11th Cir. 2013).
6 Compare Alea London, Ltd., 2008 WL 11435609, at *3 (“Living things cannot be properly characterized as a solid for purposes of the pollution exclusion.”) and Westport Ins. Corp., 761 F. Supp. 2d at 1343 (bacteria are living organisms and therefore not readily classified as “solid, liquid, gaseous, or thermal” substances) with Waserstein, 424 F. Supp. 2d at 1334, 1336 (like bacteria, “’living organisms,’ ‘microbial populations,’ ‘microbial contaminants,’ and ‘indoor allergens’ fit the ordinary definition of a ‘contaminant,’” as alleged had a contaminating effect, and the plain meaning of the term “solid” is not limited to non-living, or non-organic irritants and contaminants).