Swiss Re Unit on the Hook for Contaminated Water Legal Costs

A water utility that faced regulatory and legal action over its alleged distribution of lead-contaminated water is entitled to excess insurance coverage from a Swiss Re unit, a federal appeals court ruled.

The insurer’s umbrella liability policy excluded legal costs related to the effects of pollutants, but it required coverage for damages in some instances when the policyholder retained coverage through another insurer. Ambiguity in that carve-out language triggered Swiss Re Corporate Solutions Elite Insurance Corp.'s duty to defend Essential Utilities Inc., the US Court of Appeals for the Third Circuit said in an unpublished opinion Monday.

Bryn Mawr, Pa.-based ...