Off-site clean up costs were not covered in this public liability policy which covered a legal liability to pay for damages.
The insurance policy in question did not cover Water Resources Act (WRA) 1991 costs incurred by a manufacturer that was obliged to pay for the clean up of fire contamination-foam, chemicals and water-when the mixture entered the water system.
The Environment Agency (EA) carried out emergency works and then claimed from the manufacturer under the WRA.
The manufacturer sought to rely on its insurance that covered “legal liability for damages”.
The insurers rejected the claim.
The High Court held the “legal liability” in tort and subsequent works notice issued and WRA claim by the EA were “quite different animals”, one being statutory to protect the environment, the other being tortuous to protect an individual.
Accordingly the insurance wording was limited to tortuous and not statutory claims-i.e. for compensation damages for loss and damage and not for WRA liability as a debt.
