Last time, we discussed The AES Corporation v. Steadfast Insurance Company, a recent Virginia case where the growing trend of climate change nuisance cases intersected with the world of insurance coverage law. Critical to the coverage analysis was whether the Plaintiffs in the underlying action, the tiny island village of Kivalina, Alaska, alleged an accident or occurrence, which the Court defined as something that is not the natural or probable consequence of the insured’s actions.
This case centers on the “accident” definition, so let’s compare how each state defines it.
- The Virginia definition says an “accident” is a result that is not natural and probable.
- South Carolina defines an “accident” as a result that is unexpected and occurs by chance.
Is it two ways of saying the same thing? How might this case have played out in an Palmetto State court?
In the Virginia case, the court decided the plaintiffs alleged that AES intentionally released greenhouse gas and had good knowledge that those emissions caused global warming. Thus, global warming was the natural and probable result of their actions, and thus not an accident. A South Carolina court could look at the same actions and find that Kivalina accused AES of emitting greenhouse gas with the knowledge of its effects. Because the result was not unexpected and not occurring by chance, there is no accident. Using a slightly different standard, a South Carolina court could come to the same conclusion.
This back and forth may cause your head to spin, but these are the interesting questions that coverage attorneys like us enjoy wrestling with. The fact that this one centers around a hot-button issue such as global warming makes it that much more interesting. (To us attorneys that is.)