Goodyear, insurers settle environmental cover dispute

AKRON, Ohio-A group of general liability insurers has agreed to pay Goodyear Tire & Rubber Co. $159 million to settle an environmental coverage dispute with the company, Goodyear has reported in a filing to securities regulators.

The settlement covers environmental property damage and some bodily injury claims, Goodyear reported in an 8-K filing to the Securities and Exchange Commission Monday. The insurers have agreed to pay the settlement in installments over 15 months, Goodyear reports.

Under other provisions of the settlement, Goodyear agreed to release the insurers from future environmental bodily injury claims, and the company agreed to indemnify the insurers for “certain claims by other parties.” Goodyear did not elaborate on which claims it would cover.

The coverage dispute originally involved 22 waste sites, but the litigation eventually was reduced to determining coverage for claims arising from a waste site in Lansing, Michigan, and another in New Castle, Delaware.

In June 2002, the Ohio Supreme Court ruled that the act of disposing of contaminated materials did not trigger the “expected and intended” pollution exclusion in Goodyear's policies. The exclusion would have been triggered only if Goodyear had intended or expected its disposal methods would pollute the environment, the court ruled (BI, July 1, 2002).

The court also ruled against the pro rata coverage allocation approach favored by Goodyear's insurers. Instead, the court held that Goodyear should be allowed to make a claim against a single primary policy from its pool of triggered policies and then pursue coverage from other primary or excess insurers, if needed, to cover its entire loss.

Among the insurers involved in the 2002 litigation were Aetna Casualty & Surety Co., subsidiaries of American International Group Inc., Bermuda Fire & Marine Insurance Co., General Reinsurance Corp., Lloyd's of London underwriters, Old Republic Insurance Co. and Travelers Indemnity Co.

From Business Insurance

Press release from Googyear