New Jersey Federal Court Finds Pollution Liability Coverage Potentially Available Despite Missing Schedule of Insured Locations
Applying New Jersey law, the U.S. District Court for the District of New Jersey held at the summary-judgment stage that an insurer’s reliance on the absence of a Schedule of Insured Property did not defeat pollution liability coverage as a matter of law. ResinTech, Inc. v. AIG Specialty Insurance Company, 2026 WL 1878513 (D.N.J. June 30, 2026). The court also held that notice under a follow-form excess policy was sufficient and denied the insurer’s motion for summary judgment on a rescission counterclaim, finding genuine disputes of material fact concerning alleged insurance application misrepresentations.
The dispute arose from environmental liabilities asserted against a company operating in the chemical processing and water-treatment sector. Municipal and state environmental authorities issued notices of violations alleging that wastewater discharges had damaged public infrastructure and violated applicable environmental requirements. The company later faced administrative proceedings, penalties, and settlement obligations, and sought coverage under primary and excess pollution legal liability policies. The insurer denied coverage, contending that the coverage grant invoked by the insured was unavailable because the policy lacked a Schedule of Insured Property endorsement referenced in the policy. The insurer also pursued rescission of policy extensions issued during a later renewal process, alleging that the insured failed to disclose circumstances that could reasonably give rise to a claim.
The policies provided Pollution Legal Liability Coverage, and the declarations page identified Coverage D-1 and D-2 as “PURCHASED.” Coverage D-1 depended on a definition of “Insured Property” tied to locations listed in a Schedule of Insured Property endorsement. The insurer argued that, because no such endorsement was attached, no covered property existed and therefore no coverage was available. The insured maintained that the declarations page created, at minimum, an objectively reasonable expectation that Coverage D-1 had been purchased and that the policy language did not clearly state that the absence of the schedule eliminated coverage.
The court concluded that the insurer’s interpretation failed as a matter of law. It reasoned that the declarations page expressly represented that Coverage D-1 had been purchased and did not disclose that portions of that coverage would be unavailable absent an additional endorsement. The court further found the policy language ambiguous because the coverage grant and related definitions incorporated a schedule that was never attached, creating an internal inconsistency rather than an unambiguous limitation on coverage. Relying on New Jersey principles favoring insureds’ reasonable expectations where ambiguity exists, the court held that the omission created uncertainty regarding the scope of covered property but did not eliminate coverage altogether.
The court also rejected the insurer’s notice defense under the excess policy, finding the insured’s claim submission and the insurer’s acknowledgment of that submission sufficient under the excess policy’s notice provisions. At the same time, the court denied summary judgment on the insurer’s rescission counterclaim, holding that factual disputes remained concerning whether the insured’s renewal application was false, whether any omission was material, and whether the insurer relied on the alleged non-disclosure.
