As has been widely reported, on July 11, 2003, the
Wisconsin Supreme Court issued its landmark decision in Johnson Controls v. General Casualty, et al. overturning its prior decision in the 1994 case of City of Edgerton v. General Casualty. Although it is always dangerous to attempt to distill a 102-page court decision into a sentence or two, what this decision essentially means for policyholders in the State of Wisconsin is that environmental cleanup costs incurred as a result of contamination that occurred all or in part prior to about 1986 may well now be covered by historic Comprehensive General Liability (CGL) policies of insurance that policyholders bought and paid for some time ago. What this means for several of the State's reimbursement programs such as the Petroleum Environmental Cleanup Fund Act (PECFA) and the Agricultural Chemical Cleanup Program (ACCP) is less clear. After all, these reimbursement programs have reimbursed policyholders over the years for eligible cleanup costs that may also be eligible for coverage under CGL policies. Will the State of Wisconsin stand in the shoes of policyholders and seek to recover reimbursement expenditures from those insurers Will DATCP require parties to sue their historic insurers before paying ACCP claims in the post-Johnson Controls era This article attempts to address some of those complexities. We are recommending to our clients that they follow the following process to assess the decision's potential favorable impacts to the bottom line. First, if not already done so, you should gather all historic insurance policies applicable prior to approximately 1986. Efforts should be made to locate actual copies of these policies by contacting the employees who were responsible for placing coverage or the brokers
Wisconsin Agri-Service Association ● 6000 Gisholt Drive Suite 208 ● Madison WI 53713 ● 608-223-1111
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