An eye care company that had stipulated with its insurer a policy covering, inter alia, losses arising out of a “pollution condition on, at, under or migrating from a location covered by the policy” filed a claim for reimbursement alleging that the COVID-19 pandemic had generated losses falling under such terms of the policy.

According to plaintiff, since the policy’s definition of “pollution condition” included “the release of any contaminant or irritant into structures” and offered “infectious or pathological wastes as examples”, it may have encompassed the coronavirus pandemic or its effects. In fact, the virus that causes COVID-19 is transmitted via saliva and respiratory secretions which are expelled into the air and onto surfaces by coughs, sneezes and speech, plaintiff said. Since the insurer denied plaintiff’s claim, the latter filed suit.

By judgment of 27 October 2022, the District Court for the Eastern District of California upheld the insurance company’s motion to dismiss plaintiff’s claim. The Federal Court stressed that in addition to the “pollution condition” the policy contained also an “indoor environmental condition” which offered coverage for contamination by certain and precisely defined infectious diseases, which did not include, even implicitly, COVID-19. The fact that the policy had created separate categories for “indoor environmental conditions” and “pollution conditions” implied that pollution condition was not to be read liberally. Such coverage provision was to be read in a more natural way, using the everyday meaning of pollution as environmental pollution, the Court said.

Reference: Vision Service Plan v. Illinois Union Insurance Company, District Court for the Eastern District of California, 27 October 2022.

Full text of the decision available at crowell.com en