A Missouri Federal Court in September 2024 dismissed the extraordinary defence by the insurer that a claim for a severe esophageal injury suffered by an 18-month old child who drank a breath freshener was a loss falling within the total pollution exclusion.
The policy covered all bodily injury that arises out of the covered products if the bodily injury “occurs after you have relinquished control of those products”. The Total Pollution Exclusion excluded coverage from “bodily injury caused by or arising out of in whole or in part, the actual, alleged, or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants’ at any time”. The exclusion defined “pollutants” as “any solid, liquid, gaseous or thermal irritant or contaminant including smoke, vapour, soot, fumes, acid, alkalised, chemicals and waste”.
The court applied the test of an ordinary person of average understanding purchasing insurance. Policies are to be given a reasonable construction and interpreted so as to afford coverage rather than to defeat coverage. The total pollution exclusion was standard language used by the insurance industry. When considered in the context of the entire policy and the event, the insurer’s interpretation of the exclusion as it pertained to the claim would yield an absurd result. Reading the exclusion to include bodily injury by the breath drops as being an “irritant” and “chemical” made no sense in the context of the requirement that the injuries be caused by or arise out of “discharge, dispersal, seepage, migration, release or escape”. Each of these words describe some type of movement of a pollutant from one place to another, from a contained position to a free one. To exclude coverage based on the movement of the breath drops from its container to a free position would deny coverage for the very risks insured, namely bodily injury from the expected and intended use of a specifically covered product. Insurance contracts cannot both promise something and take it away without being illusory.
A similar decision would be arrived at in a South African court on the same wording.