No Coverage for Failure to Warn of TCE Contamination Plume
The Missouri Court of Appeals, applying Missouri law, held that insurers had no duty to defend or indemnify a defense contractor in connection with a class action alleging failure to warn of groundwater contamination. Certain Underwriters at Lloyd’s London v. Northrop Grumman Corp., 2025 WL 3072808 (Mo. Ct. App. Nov. 4, 2025). The court affirmed summary judgment in favor of the insurers, finding that the underlying claims arose solely from conduct post-dating expiration of the relevant policies.
The coverage dispute arose after a class of Missouri property owners sued a company operating in the defense manufacturing sector for allegedly failing to disclose and remediate trichloroethylene (“TCE”) contamination. The plaintiffs claimed, among other things, that the company failed to monitor the spread of TCE, negligently remediated the plume, and failed to warn the public of the spread, despite knowing of it since at least 2004. Ultimately, all causes of action were dismissed except one for failure to warn. The parties settled this cause of action in 2023.
The company sought coverage for the defense of the class action and indemnity for the settlement under occurrence-based policies issued by insurers with policy periods spanning 1964 to 1971, when the initial TCE release occurred. The insurers denied coverage, asserting that the class action alleged no “personal injury” or “property damage” occurring during the relevant policy periods. The insurers then filed declaratory judgment actions in Missouri state court, which granted summary judgment in their favor.
On appeal, the company argued that the class action plaintiffs’ harm stemmed from contamination originally caused by manufacturing activities in the 1960s and thus was “because of” property damage that took place during the policy periods. The insurers countered that the class action was based solely on post-2000 conduct, namely, the company’s failure to warn, monitor, or remediate after acquiring the site in 2001. The Court of Appeals agreed with the insurers, explaining that plaintiffs’ claims were based on the insured’s actions in the 21st century, not the events giving rise to the contamination in the 1960s and 1970s. The court explained that the plaintiffs’ asserted damages are not “because of” property damage caused by the contamination event because the plaintiffs’ did not claim that the insured contaminated groundwater. Instead, the court determined that the plaintiffs’ claims related to the insured’s failures to warn and inadequate remediation that occurred long after the policies expired. Accordingly, the court held that coverage was unavailable for the class action.
