“Policyholders Get EPA Coverage Clarity From Texas Justices”
In recent ruling that a U.S. Environmental Protection Agency proceeding against an alleged polluter is a “suit” triggering an insurer’s duty to defend, the Texas Supreme Court released policyholders from the dilemma of either defending themselves without insurance or rolling the dice in a civil suit to try to secure coverage.
David White, counsel in Thompson & Knight LLP’s Dallas office, disagreed, saying he thinks it is “very unlikely” that the insurance industry will see a broadening of coverage for other types of administrative proceedings following the Texas high court’s ruling.
“Federal courts, including the Fifth Circuit, frequently deny coverage for administrative proceedings under other types of policies that explicitly require formal adjudication in a court or arbitration; these courts adhere to the insuring agreements as written,” White said.
In addition, White pointed out, most modern policies contain exclusions that explicitly disclaim coverage for administrative proceedings.
“This suit is an outlier that should not affect coverage in most modern insurance disputes,” he said.