Don't Drink the Water: Court Finds Absolute Pollution Exclusion Precludes Coverage for Town Intentionally Contaminating Its Water Supply

摘要

Crestwood, Illinois (Village) is a Chicago suburb that approximately 11,000 people call home. It was incorporated in 1928, and has been governed by the same family since 1970. Unfortunately, the Village made recent headlines after it was discovered that town officials intentionally distributed contaminated tap water to residents and businesses in order to save money. In Village of Crestwood v. Ironshore Specialty Insurance Co., Nos. 1-12-0112 and 1-12-0227 WL 660496 (Ill. App. Ct., 1st Dist., 5th Div. Feb. 22) (Crestwood), the Illinois Court of Appeal determined that absolute pollution exclusions in certain of the Village's insurance policies precluded coverage for liabilities arising out of the Village's activities.