The Commonwealth Court recently held that certain Comprehensive General Liability (“CGL”) “occurrence” insurance policies issued before the institution of a blanket pollution exclusion cover latent environmental contamination that occurred during the policy period, even when such contamination does not manifest until after the policy period expires. This holding identified latent environmental contamination as falling within an exception to the longstanding rule that CGL occurrence insurance policies are triggered by the first manifestation of injury. Pennsylvania Manufacturers’ Ass’n Insurance Co. v. Johnson Matthey, Inc., (Johnson Matthey), No. 330, 2017 WL 1418401 (Pa. Commw. Ct. Apr. 21, 2017).
Determining when an “occurrence” under a CGL policy is triggered by environmental contamination can have important practical implications. Insurers take the position that the “first manifestation rule” applies. The first manifestation rule limits the occurrence to one trigger—the time the contamination first manifested. Insureds take the position that the “multiple trigger exception” applies, covering latent contamination over a broader period of time and giving insureds access to multiple policies for a single event. The difference in when a policy is triggered can be significant for how insureds conduct themselves and for how other PRPs (including for example, insureds’ contribution defendants) conduct themselves.