AIG Faces Suit Over San Francisco Pollution Liability Coverage

An American International Group Inc. unit is wrongfully attempting to avoid paying legal costs for an environmental restoration contractor hit with litigation over its work on a contaminated former US Navy shipyard in San Francisco, the policyholder alleged.

AIG Specialty Insurance Co. threatened not to renew coverage for Tetra Tech EC Inc. even though the insurer knew its policies potentially covered the contractor in litigation related to environmental testing and remediation work for radioactive materials at the site, Tetra Tech said in a complaint filed in the US District Court for the Northern District of California.

AIG covered Tetra Tech ...