Liberty Mutual Pollution Insurance Suit Sent Back to Lower Court

Two Liberty Mutual Insurance Co. units failed to convince the Fifth Circuit that the insurer has no duty to pay for a car auction company’s pollution settlement, though the appeals court relieved the carrier from having to cover the policyholder’s legal defense costs.

“In Texas, an insurer’s duties to defend and indemnify its insured are ‘distinct and separate duties,’” the US Court of Appeals for the Fifth Circuit said Monday, citing Texas Supreme Court case law. The appeals panel sent the case back to a lower court to determine whether Liberty needs to pay for the underlying settlement.

In 2016, ...