Georgia Courts Call for More Specific Definitions in Insurance Policies

A landlord’s commercial liability insurer, Georgia Farm Bureau Mutual Insurance Company, brought an action against the landlord and tenant for declaratory judgment that tenant’s personal injury lawsuit was excluded by a pollution clause. Smith v. Georgia Farm Bureau Mut. Ins. Co., 771 S. E.2d 452 (Ga. App. 2015). Plaintiff, Amy Smith, and her daughter, began renting a home from Bobby Chupp in 2007. While they were living there, the paint in the home started to chip and crack, and Smith’s daughter began having health complications consistent with lead poisoning. A physician later diagnosed her with lead in her bloodstream that was likely caused by ingestion of lead based paint. The physician also determined that the level of lead in her bloodstream would cause permanent and debilitating disabilities.

The trial court granted declaratory judgment in favor of the insurer due to the pollution clause in the insurance policy. This clause precluded recovery for injuries or damages arising from pollutants. The clause further defined pollutants as any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. On appeal, the Court held that the terms “contaminants” and “pollutants” in a pollution exclusion clause, like the one the insurer includes, were too ambiguous, and must be construed against the insurer. Sullins v. Allstate Ins. Co., 667 A.2d 617 (Md. App. 1995). The Court applied a reasonable person test in determining how the policy should be read. They found that the policy should be read as a layman would read it and not analyzed as if by an insurance expert, and any doubt as to potential coverage should be resolved in favor of the insured. Further, if the insurer had intended for the policy to cover lead based paint then it should have been specifically listed in the policy. The Court held that the pollutant exclusion clause did not apply and the insurer has a duty to defend the landlord against the tenant’s lawsuit.

To read more please click the following link to the court opinion: Court Opinion

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