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Q: When would a client need the Total Pollution Exclusion form with Hostile Fire CG 2155?

23 Aug
Business Fire

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Q: When would a client need the Total Pollution Exclusion form with Hostile Fire CG 2155?  I am underwriting a risk for a commercial glazier and the agent is requesting this form, in lieu of CG 2149 Total Pollution Exclusion.  This is her example of why they are requesting this coverage.

Agent wants this coverage in case the insured’s building burns down due to a hostile fire and the vapors were to pollute the air and cause BI or PD to an adjacent property or individuals.  They want to make sure there is coverage to the 3rd party.  I believe the agent is off on the coverage, but I need a resource that explains this coverage.

A: 

Your agent is correct.  I even like the example provided.  Here’s the issue:

Over the past decades, the courts have ruled that inhalation of smoke clearly falls within the definition of “pollution” which the policy states as:  Any solid, liquid, gaseous or thermal irritant or contaminant, include smoke, soot, fumes, acids, alkalis, chemicals and waste.

Due to premises and operations risk, a property occupier can be held legally liable for injury arising out of that occupancy, which would include a building fire that results in smoke inhalation and injury.

The original policy language provides an exception granting coverage for “hostile fire” that results in bodily injury or property damage.  When the Total Pollution Exclusion endorsement (CG 21 49) is added, this coverage is removed along with the other exceptions for coverage under exclusion f.  In fact, the agent is asking for CG 21 55, which leaves intact the Total Pollution wording you desire to add, but provides this limited exception for coverage and is a commonly used compromise by insurance underwriters.  In fact, I typically recommend that the agent ask for CG 21 65, which provides an exception as well for breakdown of building heating, cooling and dehumidifying equipment as well as mobile equipment spills.

While there are many environmental pollution concerns that rightfully should be covered under a pollution policy, in fact, that part of the industry typically does not cover hostile fire as it is most often covered by the standard CGL.

I hope that this is helpful.  Please let  me know if more assistance is needed

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