The federal district court for the District of Hawaii ruled that under two policies that lacked pollution exclusions, an insurer had an obligation to defend a fossil fuel company in climate change-related lawsuits brought by the <a href="https://climatecasechart.com/case/city-county-of-honolulu-v-sunoco-lp/">City and County of Honolulu</a> and the <a href="https://climatecasechart.com/case/county-of-maui-v-sunoco-lp/">County of Maui</a>. First, the court found that the underlying lawsuits “possibly allege an occurrence,” or “accident,” that was covered under the policies based on the standard articulated by the Hawai‘i Supreme Court. Second, on the question of whether property damage occurred during the two policies’ terms, which ran from February 1, 1986 to February 1, 1988, the court was “skeptical” that the underlying complaints’ allegations of greenhouse gas emissions during that period equated to allegations of property damage but concluded that it was not necessary to reach that issue because the underlying complaints possibly alleged property damage during the policies’ terms. In particular, the court concluded that allegations “that sea level rise has been rising since the 1960s, causing flooding, and inundating low-lying property,” were “sufficient to raise the potential or possibility of coverage” under the policies, even if there were not allegations about “exactly when the flooding took place nor precisely how it damaged property.” The court also found that undated allegations of property damage were sufficient for the fossil fuel company to meet “its very light burden to prove the possibility of coverage” in order to establish the duty to defend. Third, the court found that the insurer could not plausibly argue that it was impossible that the underlying complaints’ requests for compensatory damages sought “damages because of property damage.”

Fossil fuel company's lawsuit against insurer for breaching its obligations to defend and indemnify the company in underlying climate change cases brought by Honolulu and Maui.

Aloha Petroleum Ltd. v. National Union Fire Insurance Co. of Pittsburgh

<p>This entry was provided by the Sabin Center for Climate Change Law. Please see the terms of use for citation and licensing of third party data.</p>

Hawaii Federal Court Said Insurer Had Duty to Defend Fossil Fuel Company in Climate Suits Under Policies Without Pollution Exclusions

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Hawaii Federal Court Said Insurer Had Duty to Defend Fossil Fuel Company in Climate Suits Under Policies Without Pollution Exclusions

Policy instrument

Risk

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance