ORS 465.480
Insurance for environmental claims

  • rules of construction
  • duty to pay defense or indemnity costs
  • contribution
  • allocation

(1)

As used in this section:

(a)

“Long-tail environmental claim” means an environmental claim covered by multiple general liability insurance policies.

(b)

“Suit” or “lawsuit” includes but is not limited to formal judicial proceedings, administrative proceedings and actions taken under Oregon or federal law, including actions taken under administrative oversight of the Department of Environmental Quality or the United States Environmental Protection Agency pursuant to written voluntary agreements, consent decrees and consent orders.

(c)

“Uninsured” means an insured who, for any period of time after January 1, 1971, that is included in an environmental claim, failed to purchase and maintain an occurrence-based general liability insurance policy that would have provided coverage for the environmental claim, provided that such insurance was commercially available at such time. A general liability insurance policy is “commercially available” if the policy can be purchased under the Insurance Code on reasonable commercial terms.

(2)

Except as provided in subsection (8) of this section, in any action between an insured and an insurer to determine the existence of coverage for the costs of investigating and remediating environmental contamination, whether in response to governmental demand or pursuant to a written voluntary agreement, consent decree or consent order, including the existence of coverage for the costs of defending a suit against the insured for such costs, the following rules of construction shall apply in the interpretation of general liability insurance policies involving environmental claims:

(a)

Oregon law shall be applied in all cases where the contaminated property to which the action relates is located within the State of Oregon. Nothing in this section shall be interpreted to modify common law rules governing choice of law determinations for sites located outside the State of Oregon.

(b)

Any action or agreement by the Department of Environmental Quality or the United States Environmental Protection Agency against or with an insured in which the Department of Environmental Quality or the United States Environmental Protection Agency in writing directs, requests or agrees that an insured take action with respect to contamination within the State of Oregon is equivalent to a suit or lawsuit as those terms are used in any general liability insurance policy.

(c)

Insurance coverage for any reasonable and necessary fees, costs and expenses, including remedial investigations, feasibility study costs and expenses, incurred by the insured pursuant to a written voluntary agreement, consent decree or consent order between the insured and either the Department of Environmental Quality or the United States Environmental Protection Agency, when incurred as a result of a written direction, request or agreement by the Department of Environmental Quality or the United States Environmental Protection Agency to take action with respect to contamination within the State of Oregon, shall not be denied the insured on the ground that such expenses constitute voluntary payments by the insured.

(d)

A general liability insurance policy that provides that any loss covered under the policy must be reduced by any amounts due to the insured on account of such loss under prior insurance may not be construed to reduce the policy limits available to an insured that has filed a long-tail environmental claim, or to reduce those policies from which an insurer that has paid an environmental claim may seek contribution. Such provisions may be a factor considered in the allocation of contribution claims between insurers under subsection (4) of this section.

(e)

The release of a hazardous substance into the waters of this state, as defined in ORS 196.800 (Definitions for ORS 196.600 to 196.921), or onto real property owned by a party other than the insured constitutes damage, destruction or injury to property. Any remedial action costs, as defined in ORS 465.200 (Definitions for ORS 465.200 to 465.545), that an insured incurs as a result of any action taken to cut off a pathway by which a hazardous substance threatens to, or has, migrated, leached or otherwise been released into the waters of this state, as defined in ORS 196.800 (Definitions for ORS 196.600 to 196.921), or onto real property owned by a party other than the insured are remedial action costs that the insured is legally obligated to pay as damages because of the damage, destruction or injury to such property even though such action also involves the property of the insured.

(3)

Intentionally left blank —Ed.

(a)

An insurer with a duty to pay defense or indemnity costs, or both, to an insured for an environmental claim under a general liability insurance policy that provides that the insurer has a duty to pay all sums arising out of a risk covered by the policy, must pay all defense or indemnity costs, or both, proximately arising out of the risk pursuant to the applicable terms of its policy, including its limit of liability, independent and unaffected by other insurance that may provide coverage for the same claim.

(b)

If an insured who makes an environmental claim under one or more general liability insurance policies that provide that an insurer has a duty to pay all sums arising out of a risk covered by the policies has more than one such general liability insurance policy that is triggered with one or more insurers, the insured shall provide notice of the claim to all such insurers for whom the insured has current addresses. If the insured’s claim is not fully satisfied and the insured files suit on the claim against less than all the insurers, the insured may choose which of the general liability insurance policies respond to the loss if not all are required to satisfy the insured’s claim. The insured or the insurers have a right to contribution as specified in subsection (4) of this section from all other insurers whose policies are triggered, and an insurer that has an obligation to pay may not fail to make payment to the insured on the grounds that another insurer has not made payment, unless the insurer has no obligation to respond to a claim until the limits of the underlying policy have been paid. The insured must choose that insurer based on the following factors:

(A)

The total period of time that an insurer issued a general liability insurance policy to the insured applicable to the environmental claim;

(B)

The policy limits, including any exclusions to coverage, of each of the general liability insurance policies that provide coverage or payment for the environmental claim; or

(C)

The policy that provides the most appropriate type of coverage for the type of environmental claim for which the insured is liable or potentially liable.

(c)

If requested by an insurer chosen by an insured under paragraph (b) of this subsection, the insured shall provide information regarding other general liability insurance policies held by the insured that would potentially provide coverage for the same environmental claim.

(d)

An insurer chosen by an insured under paragraph (b) of this subsection may not be required to pay defense or indemnity costs in excess of the applicable policy limits, if any, on such defense or indemnity costs, including any exclusions to coverage.

(4)

Intentionally left blank —Ed.

(a)

An insurer that has paid all or part of an environmental claim may seek contribution from any other insurer that is liable or potentially liable to the insured and that has not entered into a good-faith settlement agreement with the insured regarding the environmental claim.

(b)

There is a rebuttable presumption that all binding settlement agreements entered into between an insured and an insurer are good-faith settlements. A settlement agreement between an insured and insurer that has been approved by a court of competent jurisdiction after 30 days’ notice to other insurers is a good-faith settlement agreement with respect to all such insurers to whom such notice was provided.

(c)

For purposes of ascertaining whether a right of contribution exists between insurers, an insurer that seeks to avoid or minimize payment of contribution may not assert a defense that the insurer is not liable or potentially liable because another insurer has fully satisfied the environmental claim of the insured and damages or coverage obligations are no longer owed to the insured.

(d)

Contribution rights by and among insurers under this section preempt all common law contribution rights, if any, by and between insurers for environmental claims.

(5)

If a court determines that the apportionment of recoverable costs between insurers is appropriate, the court shall allocate the covered damages between the insurers before the court, based on the following factors:

(a)

The total period of time that each solvent insurer issued a general liability insurance policy to the insured applicable to the environmental claim;

(b)

The policy limits, including any exclusions to coverage, of each of the general liability insurance policies that provide coverage or payment for the environmental claim for which the insured is liable or potentially liable;

(c)

The policy that provides the most appropriate type of coverage for the type of environmental claim;

(d)

The terms of the policies that related to the equitable allocation between insurers; and

(e)

If the insured is an uninsured for any part of the time period included in the environmental claim, the insured shall be considered an insurer for purposes of allocation.

(6)

If an insured is an uninsured for any part of the time period included in the environmental claim, an insurer who otherwise has an obligation to pay defense costs may deny that portion of defense costs that would be allocated to the insured under subsection (5) of this section.

(7)

Intentionally left blank —Ed.

(a)

There is a rebuttable presumption that the costs of preliminary assessments, remedial investigations, risk assessments or other necessary investigation, as those terms are defined by rule by the Department of Environmental Quality, are defense costs payable by the insurer, subject to the provisions of the applicable general liability insurance policy or policies.

(b)

There is a rebuttable presumption that payment of the costs of removal actions or feasibility studies, as those terms are defined by rule by the Department of Environmental Quality, are indemnity costs and reduce the insurer’s applicable limit of liability on the insurer’s indemnity obligations, subject to the provisions of the applicable general liability insurance policy or policies.

(8)

The rules of construction set forth in this section and ORS 465.481 (General liability insurance policies) and 465.483 (General liability insurance policies) do not apply if the application of the rule results in an interpretation contrary to the intent of the parties to the general liability insurance policy. [1999 c.783 §4; 2003 c.799 §2; 2013 c.350 §4]

Source: Section 465.480 — Insurance for environmental claims; rules of construction; duty to pay defense or indemnity costs; contribution; allocation, https://www.­oregonlegislature.­gov/bills_laws/ors/ors465.­html.

Notes of Decisions

Where insurer completely settles its liability with insured, settling insurer is no longer “liable or potentially liable” for purposes of paying contribution to other insurers. Fireman’s Fund Insurance Co. v. Ed Niemi Oil Co., 436 F. Supp. 2d 1174 (D. Or. 2006)

Insurer that pays environmental claim may seek contribution from other insurers that covered risk, whether or not liability of those other insurers has been determined. Certain Underwriters v. Massachusetts Bonding and Insurance Co., 235 Or App 99, 230 P3d 103 (2010), Sup Ct review denied

Where Environmental Protection Agency sent letters to insured entity and letters were hostile and directed entity to take action, letters were “suits” for purposes of Oregon Environmental Cleanup Assistance Act. Anderson Brothers, Inc. v. St. Paul Fire & Marine Insurance Co., 729 F3d 923 (9th Cir. 2013)

465.003
Definitions for ORS 465.003 to 465.034
465.006
Policy
465.009
Rules
465.012
Technical assistance to users and generators
465.015
Toxics use and hazardous waste reduction plan required
465.018
Notification of Department of Environmental Quality upon completion of plan or system
465.021
Review of plan or system
465.027
Contract for assistance with higher education institution
465.032
Form of implementation summary
465.034
Application of ORS 465.003 to 465.034
465.037
Short title
465.101
Definitions for ORS 465.101 to 465.131
465.104
Fees for petroleum product delivery or withdrawals
465.106
Amount of fee to be set by State Fire Marshal
465.111
Department of Revenue to collect fee
465.112
Amounts held in trust
465.114
Extension of time for paying fee
465.117
Records of petroleum products transactions
465.121
Rules
465.124
Application of ORS chapters 305 and 314 to fee collection
465.127
Disposition of fees
465.131
Fee imposed by ORS 465.104 in addition to fees established by local government
465.200
Definitions for ORS 465.200 to 465.545
465.205
Legislative findings
465.210
Authority of department for removal or remedial action
465.215
List of facilities with confirmed release
465.220
Comprehensive statewide identification program
465.225
Inventory of facilities needing environmental controls
465.230
Removal of facilities from inventory
465.235
Public inspection of inventory
465.240
Inventory listing not prerequisite to other remedial action
465.245
Preliminary assessment of potential facility
465.250
Accessibility of information about hazardous substances
465.255
Strict liability for remedial action costs for injury or destruction of natural resource
465.257
Right of contribution from other person liable for remedial action costs
465.260
Removal or remedial action
465.265
“Person” defined for ORS 465.265 to 465.310
465.270
Legislative findings and intent
465.275
Remedial action and financial assistance program
465.280
Rules
465.285
Requirements for financial assistance
465.290
Financial assistance agreement not General Fund obligation
465.295
Decision regarding financial assistance not subject to judicial review
465.300
Records and financial assistance applications exempt from disclosure as public record
465.305
Application fees
465.310
Accounting procedure for financial assistance moneys
465.315
Standards for degree of cleanup required
465.320
Notice of proposed remedial action or release from liability
465.325
Agreement to perform removal or remedial action
465.327
Agreement to release party from potential liability to facilitate cleanup and reuse of property
465.330
State remedial action costs
465.333
Recovery of costs of program development, rulemaking and administrative actions as remedial action costs
465.335
Costs, penalties and damages as lien
465.340
Contractor liability
465.375
Monthly fee of operators
465.376
Special hazardous waste management fees
465.378
Department to work with other states to avoid disruption of waste flows
465.381
Hazardous Substance Remedial Action Fund
465.386
Commission authorized to increase fees
465.391
Effect of certain laws on liability of person
465.400
Rules
465.405
Rules
465.410
Ranking of inventory according to risk
465.420
Remedial Action Advisory Committee
465.425
“Security interest holder” defined for ORS 465.430 to 465.455
465.430
Legislative findings
465.435
Rules relating to exemption from liability for security interest holder
465.440
Rules relating to exemption from liability for fiduciary
465.445
Advisory committee
465.450
Limitation on commission’s discretion to adopt rules
465.455
Construction of ORS 465.425 to 465.455
465.475
Definitions for ORS 465.475 to 465.484
465.478
Legislative findings
465.479
Lost policies
465.480
Insurance for environmental claims
465.481
General liability insurance policies
465.483
General liability insurance policies
465.484
Unfair environmental claims settlement practices
465.485
Short title
465.500
Purpose
465.503
Exemption from administrative or judicial action to compel removal or remedial action
465.505
Waste minimization requirements for dry cleaning facilities
465.507
Dry cleaning advisory group
465.510
Dry Cleaner Environmental Response Account
465.517
Annual fee and gross revenue fee for dry cleaning facilities
465.520
Fee on sale or transfer of dry cleaning solvent
465.523
Fee on use of dry cleaning solvent
465.525
Calculation of fee for partial gallons
465.527
Reporting of fees
465.531
Department of Environmental Quality may contract for collection of fees
465.536
Late charges
465.545
Suspension of dry cleaning fees
465.550
Definitions for ORS 465.550 and 465.555
465.555
County assessment of effects of major recovery or remedial action at storage or disposal site for chemical agents
465.600
Definitions for ORS 465.600 to 465.621
465.603
Procedure to create public authority
465.606
Board of directors
465.609
General powers
465.612
Obligations of authority not obligations of local government
465.615
Exemption from taxation
465.618
Remedial action costs
465.621
Dissolution
465.900
Civil penalties for violation of removal or remedial actions
465.992
Civil penalty for failure to pay fees
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