Insurance Dispute Over Shopping Center Pollution Coverage Leads to Litigation

Two insurance providers, Travelers Property Casualty Company of America and St. Paul Fire and Marine Insurance Company, have initiated legal action against Washington Shoppes LP and The Broadbent Company, Inc. concerning a dispute over environmental remediation costs. Washington Shoppes LP, the current operator of a shopping center located at 10021 E. Washington St., Indianapolis, sought insurance coverage for defense and indemnity against claims from the Indiana Department of Environmental Management. These claims relate to contamination identified at the property, previously occupied by Sunrise Dry Cleaners from 1987 to 1996, involving pollutants such as tetrachloroethylene (PCE) found in soil and groundwater during a 2023 site investigation. Travelers and St. Paul Fire and Marine declined coverage, citing policy exclusions for pollutant-related claims and asserting that coverage obligations are contingent upon Washington Shoppes meeting burdens of proof related to the timing and disclosure of contamination knowledge. A significant issue in the case is whether Washington Shoppes knew of the contamination prior to acquiring the property or before the issuance of insurance policies, impacting the insurers' liability. Travelers is seeking a judicial declaration that it has no duty to defend or indemnify Washington Shoppes regarding these environmental claims. The lawsuit was filed in Marion Superior Court and highlights complex coverage issues arising from environmental contamination claims linked to legacy commercial activities on the property. This litigation reflects ongoing challenges in environmental liability insurance, particularly concerning historical site contamination, insurer policy exclusions, and obligations under indemnity agreements.