The Virginia Supreme Court has ruled that the insurance carrier for an energy company sued over global climate change did not have a duty to defend or provide indemnity coverage because there was no “occurrence” as required by the relevant policy. AES Corp. v. Steadfast Ins. Co., No. 100764 (Va. 9/16/11). In the climate change lawsuit, plaintiffs sued 20 oil, coal and electric utility companies alleging that they emitted large quantities of carbon dioxide causing the Arctic sea ice that formerly protected an Alaskan coastal village from winter storms to melt. In Kivalina v. Exxon Mobil Corp., 663 F. Supp. 2d 863 (N.D. Cal. 2009), the district court dismissed the complaint, and an appeal is pending before the Ninth Circuit.

According to the trial court, the complaint failed to allege an “occurrence,” as that term is used in commercial general liability (CGL ) policies held by plaintiff. The Virginia Supreme Court noted that in Kivalina, the village alleged that AES “intentionally” released tons of carbon dioxide and greenhouse gases into the atmosphere as part of its electricity-generating operations. According to the court, “[W]e have held that an intentional act is neither an ‘occurrence’ nor an ‘accident’ and therefore is not covered by the standard policy.”