Governor Kitzhaber signed Senate Bill 814 into law yesterday (June 10), a significant piece of legislation affecting environmental insurance coverage. The Bill, sponsored by Senators Shields and Johnson, is designed to clear up certain questions causing friction between insurance companies and their policyholders.
In Oregon, some general liability insurance policies cover "property damage" from environmental contamination and pay for the cost to remediate contamination. Sometimes those policies are old or missing, leading to fights and litigation over coverage. The Oregon Environmental Cleanup Assistance Act, passed in 1999, helped some with "lost policy" disputes by requiring insurance companies to make a diligent and good faith effort to find missing policies and determine if coverage was available.
But even when old policies are found, insurers and insureds often still disagree on whether coverage is available or how to manage those claims that are covered. Senate Bill 814 amends the Oregon Environmental Cleanup Assistance Act in an attempt to standardize additional coverage questions under Oregon law, such as:
- Allowing policies to be assigned to cover claims in certain cases;
- Including as a covered cost any action taken to stop contamination from migrating;
- Establishing a mediation program for certain disputes between insurers and insureds;
- Requiring insurance companies to assign local environmental lawyers and experts to environmental cases; and
- Prohibiting certain acts as "unfair claims practices," such as slow investigation or payment of claims, or harassing policyholders. SB 814 also allows policyholders to collect fees and up to triple damages for some unfair claims practices.
Senate Bill 814 is a potential boon for policyholders facing disagreements with their insurance companies over environmental insurance coverage. The history and full text of Senate Bill 814 can be found here.