A federal court in Pennsylvania has held that an insurer which insured an oil company from 1972 to 1982 was required to defend a case brought by the federal government to recover cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Wiseman Oil Co., Inc. v. TIG Ins. Co., No. 2:11-cv-01011 (W.D. Pa. 3/19/13). According to the opinion, the insurer asserted that it had no duty to defend in part because the complaint did not clearly demonstrate that the alleged cleanup costs constituted covered damages under the policy. The insurer also asserted that because the suit was against a husband and wife who owned the oil company, not the company itself, it had no duty to defend the litigation.

The court disagreed, finding that under applicable state law the insurer has a duty to defend unless the complaint clearly demonstrates that the alleged damages are not covered under the policy. It held that the government’s CERCLA complaint left open the possibility that the damages would be covered under the policies. The court also determined that it was reasonable to construe the CERCLA complaint as seeking to impose liability on the individuals because of their actions as owners and officers of the oil company during the policy period and that the business’s insurance therefore would provide coverage.