Howard Davis P.C.

Practice Areas

insurance Cost Recovery and Archeology of cost policies.

In order to defray client’s out-of-pocket costs, we frequently pursue insurance companies to cover the costs associated with environmental contamination and remediation. Certain insurance policies such as comprehensive general liability (CGL) and homeowner policies may cover claims associated with contaminated soils and groundwater. We have extensive experience with these kinds of policies, and a keen understanding of the judicial interpretations of their various standard clauses. We help clients understand the meaning of their policies and, where appropriate, collect proceeds.

Although the policy language is often the same or similar in policies issued nationwide, courts in different states interpret it differently. Unlike many other states, New Jersey courts have held that certain CGL and homeowner policies do cover claims associated with contaminated soils and groundwater. Specifically, New Jersey courts have held that when environmental contamination occurred prior to about 1985, a period when an “absolute pollution exclusion” typically was inserted into standard insurance policies, these policies nevertheless may cover the costs to clean up contamination that results in damage to another party, including groundwater contamination, and offsite polluted soils that contribute to groundwater contamination, among other damages.

Of course, a careful review of the client’s policies is always crucial. Despite the standard forms, some policies did not include pollution exclusions until the 1990s. And residential homeowner policies typically provide coverage into the 2000’s. Even now, certain policies may not exclude pollution. Our familiarity with the various policies that have been issued by the insurance industry over time helps us provide efficient assistance when it is necessary to parse through potentially applicable policies.

Especially because we have served clients with modest means, we have developed economical and organized procedures for document review and analysis, and regularly prepare our own analytical documentation to allocate responsibility among potentially liable parties and insurance companies.

We also have an excellent track record assisting clients in identifying ”historic insurance” that may provide coverage, and seeking coverage from these policies to help pay for and facilitate the investigation and remediation of environmental contamination. Over the past year alone we have secured over 2.5 million dollars for our clients from insurance companies for environmental investigation and remediation. “Historic insurance” generally refers to insurance that was issued prior to the generalized insertion of a pollution exclusion, typically prior to 1985, Historic insurance can be a significant funding source for environmental cleanups. Unfortunately, many clients have either thrown out or misplaced their old insurance policies.  Locating those policies, or at least some evidence of their existence, can necessitate an extensive document archeology. We assist our clients to review their files, sometimes long forgotten in a dusty basement or attic somewhere, as well as the files of their insurance agents and other parties, in order to find potentially applicable historic insurance.  For example, on behalf of one client that owned a former facility that stored hazardous substance, we reviewed files maintained over a 40-year period.  These efforts led to successful negotiations with insurance providers, resulting in a substantial cost recovery. In another case, we retained a forensic insurance expert to review files at Lloyds of London, which resulted in our client locating coverage for the contamination of his site. 

We also scrupulously investigate the insurance coverage of our adversaries as an avenue of cost-recovery.

Our painstaking insurance recovery efforts have significantly reduced out-of-pocket expenses for many clients. For example, on behalf of one industrial client that historically used hazardous chemicals in its processes, we successfully negotiated an approximately 97% insurance coverage under its general liability policies. This means that 97% of the environmental costs of the remediation of the contamination at the client’s property were paid for by the insurance companies. 

In the homeowner context, we frequently are called upon to assist clients in pursuing insurance coverage for contamination from leaking underground storage tanks used to store heating oil. In certain instances, it is possible to secure 100% coverage under the homeowner liability policy and facilitate remediation. We have done this even when the tank insurance provider previously had walked off the job and refused to provide coverage. 

On behalf of another residential client where the estimated cost to cleanup exceeded the combined value of the home and property, we successfully persuaded the insurance provider to pay the client the estimated value of the home and land in addition to paying to remediate the site to obtain a No Further Action (“NFA”) Letter from the NJDEP.