The Oklahoma Supreme Court, in response to a certified question from a federal district court, has ruled that the enforcement of an “indoor air” exclusion in a liability policy is not against the public policy of the State of Oklahoma. Siloam Springs Hotel, LLC v. Century Surety Co., 2017 WL 696815 (Okla. Feb. 22, 2017).
Several guests inside a hotel suffered bodily injury due to carbon monoxide poisoning. The carbon monoxide allegedly escaped into the air due to a leak from the hotel’s indoor swimming pool heater. The insured hotel sought coverage under its liability policy, and the insurer denied the claim on the basis of an “indoor air” exclusion, which excluded coverage for bodily injury “arising out of, caused by, or alleging to be contributed to in any way by any toxic, hazardous, noxious, irritating pathogenic or allergen qualities or characteristics of indoor air regardless of cause.”
The Oklahoma Supreme Court ruled that the exclusion was enforceable, and that it did not violate the public policy of the State of Oklahoma. It noted that the parties were free to enter a contract with terms that limit coverage, as long as it did not violate the law or the public policy of the state, and that “Just because one believes the air they breathe might be contaminated, and expects a business should carry insurance to cover that eventuality, does not mean the law requires it.”