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4:22 pm, April 13, 2024
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Construction Dust: Does Your Insurance Policy Consider It a Pollutant?

By Trent Cotney

Trent Cotney

We all know that there are pollutants on construction sites. These can include asbestos and lead, which are hazardous for workers and building residents. But what about construction dust?

This question was raised in a recent Northern District of Georgia insurance coverage decision. This case illustrates the intricacies of understanding insurance policies and what they cover. Specifically, it points to the Absolute Pollution Exclusion, which often is present in a General Liability Policy.

What the Absolute Pollution Exclusion Permits

An Absolute Pollution Exclusion in an insurance contract removes coverage of pollution exposure resulting from normal operations. It allows insurance companies to preclude liability for any pollution-related lawsuits that involve their customers. In the 1980s, this provision became popular after insurers were on the hook for numerous lawsuits against pollution-producing companies.

What This Case Involved

In Love Lang v. FCCI Insurance Company, 530 F.Supp.3d 1299 (N.D. Ga 2021), Joel Edgar Love Jr. lived in an apartment building where construction work was being done. He sustained injuries due to the amount of construction dust produced when the construction workers removed bricks from the part of the apartment building. They accomplished this by drilling holes in the grout, then cutting those holes and taking the bricks out. This process resulted in large clouds of dusk entering apartment units.

The construction dust itself was not toxic. It did not include lead, asbestos, or other dangerous substances. In most cases, the dust would have been considered harmless. However, Joel Love had emphysema, and the dust adversely affected his unhealthy lungs. When it accumulated in his apartment, he had to be hospitalized.

Love initially complained about the dust, but the workers continued the project. Then he filed suit against the construction company and the building owner. (Love passed away before the case was decided, so the plaintiff was Michelle Lynn Love Lang, administrator of Love’s estate.) The construction company’s insurer was FCCI Insurance Company. FCCI denied coverage for this matter based on the insurance policy’s pollution exclusion. According to the policy, “This insurance does not apply to: (1) ‘Bodily injury’ or ‘property damage’ which would not have occurred in whole or part  but for the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of ‘pollutants’ at any time.”  Further, the policy described a “pollutant” as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.”

What the Court Considered

In reviewing the case, the United States District Court for the Northern District of Georgia had to determine if construction dust did or did not meet the definition of “pollutant” per the policy. Also, based on Georgia law, the court was tasked with considering if the policy language was clear or ambiguous. If ambiguous, the policy should favor the insured.

The court reviewed several previous decisions in studying the pollution exclusion at issue. In some cases, lead paint and carbon monoxide gas were categorized as pollutants, but in other cases, nitrogen and natural gas were not. Regarding the natural gas determination, the earlier court stated that exposure to natural gas is not necessarily hazardous and does not necessarily result in injury. The court also ruled that the insurer should not be able to sell a liability policy to a company that handles natural gas but then exclude coverage for damages related to natural gas.  As for nitrogen, an earlier court determined it was not a pollutant because it naturally exists in the air. Also, the insured company stored liquid nitrogen and would be expected to be insured for a nitrogen leak.

Based on those decisions, the Love Lang court could have ruled that construction dust was not a pollutant, which would have meant that FCCI would have had to cover the claim for bodily injury. However, the court did not take that stance.

How the Court Ruled

Instead, the court explained it was “sympathetic to Plaintiff’s position and the circumstances of this case. Yet, dust is inescapably and unambiguously a ‘pollutant,’ i.e., an ‘irritant or contaminant’ under the circumstances here where Plaintiff has alleged that the dust, whether due to its accumulation or otherwise, caused Mr. Love’s difficulty breathing and ultimate ICU visit.” Further, “ ‘a cloud of dust, even absent toxicity or other impurities, is a substance that was an ‘irritant’ and a ‘contaminant’ to Mr. Love and his respiratory system.” Rather than focusing on whether construction dust was always a pollutant, the court focused on whether it was an irritant for a specific plaintiff.

The case ended with a summary judgment, no appeal was filed, and the lawsuit was dismissed. It is interesting to note, however, that per the final opinion, “The Court reiterates its discomfort with this conclusion in light of the apparent absurdity of a commercial general insurance policy that does not cover activities associated with an entity’s primary business, the frequency of these pollution exclusion coverage disputes under grim fact scenarios, and the harm suffered by those injured and their families, like Mr. Love and Plaintiff Love Lang. But in light of the explicit authority detailed herein, the Court can do no better.”

 Advice for Contractors

The ruling in this case may serve cautionary to contractors as they sign contracts and begin work. Insurers will likely cite this case when trying to deny future claims regarding construction dust or other naturally occurring substances on construction sites.

If you have concerns about your insurance policies and your coverage, do not hesitate to consult legal counsel. Other options, such as an environmental liability policy, can help cover your business.

The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

Trent Cotney is a partner and Construction Practice Group Leader at the law firm of Adams and Reese LLP and NRCA General Counsel. For more information on this subject, please contact the author at trent.cotney@arlaw.com.

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