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Prediction: Insurers will revisit pollution wordings

Environment
Construction and Engineering
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Prediction

We will continue to see insurers amending their pollution and contamination (and other) exclusions following the decision in Brian Leighton (Garages) Ltd v Allianz Insurance plc. The case concerned a sharp object that penetrated a fuel pipe, resulting in contaminated insured property. The Court of Appeal allowed the insured to recover, even though the policy excluded "damage caused by pollution or contamination". The majority held that the exclusion requires pollution or contamination to be the proximate cause, and the exclusion did not bite because the proximate cause was the penetration of the fuel pipe. As most pollution/contamination incidents are initially caused by something else, insurers who do not intend to provide cover in such circumstances will need to revisit their wordings.

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