Article ID: dc2876013932ceef10acc6110257937b68d8c742162f2b230bdd23021f325acf
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URL: https://www.businessinsurance.com/8th-circuit-vacates-25m-coverage-award-against-insurer/
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8th Circuit vacates $25M coverage award against insurer - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers 8th Circuit vacates $25M coverage award against insurer by Louise Esola Coverage Disputes , Workers Comp Coverage , Workplace Safety Sep 3, 2026 A federal appeals court on Thursday vacated a $25 million award against Commerce and Industry Insurance Co., ruling that a pollution exclusion barred coverage for claims arising from a fatal oil and gas well explosion. In XTO Energy Inc. v. Commerce and Industry Insurance Co. , a three-judge panel of the 8th U.S. Circuit Court of Appeals reversed a North Dakota federal court ruling that an exception to the exclusion restored coverage. XTO owned and operated an oil and gas well near Watford City, North Dakota, where an explosion and fire occurred in June 2016. A contractor working on XTO’s behalf was killed, and several workers suffered severe burns and other injuries. XTO had retained Missouri Basin to provide “company man” services at the well. Their contract required Missouri Basin to obtain liability insurance supporting its agreement to indemnify XTO against claims brought by Missouri Basin’s employees and subcontractors. Missouri Basin obtained primary and umbrella coverage from Berkley National Insurance Co. and a second-layer umbrella policy with a $25 million limit from Commerce, a unit of American International Group. After lawsuits were filed over the explosion, XTO sought coverage under the Commerce policy. Commerce denied the claim under an exclusion for bodily injury and other losses arising from the release or escape of pollutants. The 8th Circuit said oil and gas qualified as pollutants under the policy and that the underlying plaintiffs suffered bodily injuries when the substances were released and ignited. The exclusion contained an exception for certain abrupt pollution events, but only if five conditions were met. One condition required written notice to Commerce within 21 days after the release became known to the insured. XTO acknowledged that timely notice was not provided. The district court had ruled that Commerce waived reliance on the notice requirement because its denial letter did not specifically cite late notice. It also found that Commerce had not shown it was prejudiced by the delay. The appeals court disagreed, holding that the notice requirement was a condition XTO had to satisfy to invoke the exception, not a late-notice defense Commerce had to raise. Because the policy clearly stated the consequences of failing to provide timely notice, Commerce was not required to demonstrate prejudice, the court said. The panel also rejected XTO’s argument that exceptions contained in Berkley’s pollution exclusion were incorporated into the Commerce policy through a follow-form provision. The policies contained conflicting pollution exclusions, and Commerce’s terms therefore controlled, the court said. 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