Following the February 3, 2023 derailment of 38 train cars carrying hazardous materials, resulting in a chemical spill and controlled burn in East Palestine, Ohio, several lawsuits have been filed seeking medical monitoring for people living in the affected areas.
Medical monitoring programs may allow for the early discovery and treatment of latent injuries even years after exposure to toxic substances, but such programs also present a substantial expense for any company. Medical monitoring claims may be covered by insurance, but coverage heavily depends on the underlying facts, policy language, and the law governing policy interpretation.
Demonstrating bodily injury may not be enough to obtain coverage
Under a standard Commercial General Liability (“CGL”) policy, policyholders sued for claims alleging medical monitoring must demonstrate bodily injury. Some courts hold that exposure to toxic chemicals generally constitutes bodily injury even without accompanying physical symptoms. However, sometimes even if an insured can demonstrate damages and bodily injury, a policy’s pollution exclusion will bar coverage. See, e.g., Techalloy Co. v. Reliance Ins. Co., 487 A.2d 820, 827-28 (Pa. Super. Ct. 1984) (finding that underlying complaint properly alleged “bodily injury” from exposure to trichloroethylene, but holding that the sudden and accidental pollution exclusion barred coverage); Travco Ins. Co. v. Ward, 715 F. Supp. 2d 699, 717 (E.D. Va. 2010) (pollution exclusion barred coverage for underlying claims alleging bodily injury relating to exposure to toxic chemicals found in drywall).
Once a court determines whether and when bodily injury occurred, it will determine if more than one policy is triggered. If more than one policy is triggered, the court must then determine allocation under the applicable policies. The available limits can differ greatly depending on what approach the court applies in making this determination. When excess policies are in play or coverage is triggered for multiple policy periods, exhaustion questions play an important role in determining the availability of those excess limits. The same is true regarding the number of occurrences – particularly because individuals are often exposed to toxic substances over long periods of time. State law determines which rules courts apply in making all these determinations.
Any policyholder facing medical monitoring allegations following the release of a toxic substance should consult with an experienced insurance coverage attorney who can review the policy language and case law to help maximize coverage.