AIG Unit Must Face County’s Revived Contamination Coverage Suit

San Bernardino County, Calif., convinced the Ninth Circuit to revive an insurance coverage suit against an American International Group Inc. unit for costs incurred while repairing environmental damage at county-owned Chino Airport that happened during a pair of decades-old wars.

The Insurance Co. of the State of Pennsylvania’s provision on annual aggregate limits in three policies didn’t apply to the county’s property damage claim under California law because it was ambiguous, Judge Jay S. Bybee wrote in a Thursday opinion for the US Court of Appeals for the Ninth Circuit.

The county argued that the insurer was liable for property ...