Lynn M. Kuchta


This comment analyzes the state high court decisions which seem to be reaching a consensus that the term "damages" in a Comprehensive General Liability policy encompasses the cost of cleaning up a hazardous waste site. In six state high court cases, the courts held in favor of the insureds, holding that cleanup costs constitute "damages." In only three state high court cases, decided by two courts, the holdings were in favor of insurers with rulings that cleanup costs do not constitute "damages." Two possible solutions to resolve the insurance carriers' dilemma regarding the "damages" question are proposed in this comment. The preferred alternative is to amend the Comprehensive Environmental Response, Compensation, and Liability Act and make cleanup costs an uninsurable interest. With reimbursement of cleanup costs by insurers an impossibility, an alternative to insurance would be necessary. The author proposes a solution to the problem in the creation of a pollution fund to clean up hazardous waste sites. As a less desirable alternative, the author recommends that insurance carriers seek alternatives to litigation such as settling out of court.