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Richardson v. Nationwide Mutual Insurance Company6/12/2003
e forms acquires particular meaning, based on repeated application to various circumstances. All of that tends toward achieving the great public office of insurance: to render certain and predictable in financial terms things which are uncertain and unpredictable in their nature.
The close relation between premium rates and forms of policies means that the same associations that aggregate and analyze claims experience also draft and license the use of policy forms. Such cooperation is expressly authorized by District law. [Citation omitted.] In the area of commercial liability insurance, the largest United States association is the Insurance Services Office (ISO). [Footnote omitted.] The policy at issue in this case is written on an ISO form.
Brief for Commissioner at 4-6 (emphasis in original).
The foregoing passage reflects the reality that although the policy here at issue is an agreement between Nationwide and REO, its content, which is a part of a "form" prepared by the insurance industry, reflects the experiences of insurers generally. Moreover, as noted by the Commissioner, the business of insurance is closely regulated. Id. at 7. Statements made by representatives of the insurance industry to obtain approval of proposed policy language can therefore be quite significant. See, e.g., Doerr v. Mobil Oil Corp., 774 So. 2d 119, 132-34 (La. 2000) (chronicling inaccurate statements by representatives of the insurance industry regarding the meaning of earlier pollution exclusion clauses), opinion corrected on unrelated grounds, 782 So. 2d 573 (La. 2001) (per curiam); Morton Int'l, Inc. v. Gen. Accident Ins. Co. of Am., 629 A.2d 831, 848-55, 868-70 (N.J. 1993) (same), cert. denied, 512 U.S. 1245 (1994); 9 LEE R. RUSS & THOMAS F. SEGALLA, COUCH ON INSURANCE § 127:8, at 127-24, § 127:14, at 127-37 (3d ed. 1997) (hereinafter COUCH).
As the Supreme Court of New Jersey has recognized, "the typical commercial insured rarely sees the policy form until after the premium has been paid." Morton Int'l, 629 A.2d at 852 (citations omitted). Moreover, insurance policies are
written by the insurers, who are "equipped with able counsel and other experts in the field," while the policyholders, who generally play no role in the drafting of such contracts "are, in vast majority, not informed in the obscurities of insurance expertise and not equipped to understand other than plain language."
Cameron v. USAA Prop. & Cas. Ins. Co., 733 A.2d 965, 968 (D.C. 1999) (quoting Hayes v. Home Life Ins. Co., 83 U.S. App. D.C. 110, 112, 168 F.2d 152, 154 (1948) (Prettyman, J.)) (internal quotation marks omitted); see also Chase v. State Farm Ins. Co., 780 A.2d 1123, 1127 (D.C. 2001). Thus,
to the extent that the pollution-exclusion clause ever was subjected to arms-length evaluation by interests adverse to the insurance industry, that evaluation occurred only when the clause was submitted to and reviewed by state regulatory authorities.
Morton Int'l, 629 A.2d at 852. It is therefore important to consider the meaning of the "form" absolute pollution exclusion clause at issue in this case at the time that it was introduced by the insurance industry and reviewed by state regulators.
II. THE HISTORY OF THE POLLUTION EXCLUSION
Prior to World War II, insurance policies in this country were structured to cover liability arising only from specific perils expressly identified therein. See Brief for Commissioner at 10. Beginning in the 1940s, insurers began to offer CGL policies which were not limited to liability for particular perils; instead, coverage started from the premise that "the risk covered was all liability
Page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 District of Columbia Personal Injury Attorneys
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