Wednesday, May 6, 2009

Court of Appeals holds that permeating odor may constitute a "physical injury"

As I discussed in my last post, in Essex Ins. Co. v. BloomSouth Flooring Corp. the United States Court of Appeals for the First Circuit discussed whether an insurer must defend a construction contractor against allegations that unpleasant odors emanated from a carpet the contractor installed.

The court first held that coverage was triggered because a permeating odor may constitute a "physical injury to tangible property" within the meaning of the policy.

I have seen this issue frequently arise in the context of fumes and airborne pollutants. No published Massachusetts appellate decision has addressed the issue. The Court of Appeals relied on two Superior Court decisions to predict that the Supreme Judicial Court would hold that an odor may be a physical injury.

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