Illinois Supreme Court Ruling: Impact on Pollution Exclusions in Insurance Policies
On January 23, 2026, the Illinois Supreme Court issued a pivotal ruling affecting pollution exclusions within Commercial General Liability (CGL) policies. The case, Griffith Foods International, Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, provides a clear interpretation that favors insurers in the debate over pollution-related claims. This decision holds significant implications for industry stakeholders, including payers and providers navigating regulatory compliance requirements.
The ruling centered on mass tort litigation in Willowbrook, Illinois, where residents alleged long-term emissions of ethylene oxide from a sterilization facility caused severe health issues, including cancer. Griffith Foods International, Inc., initially operated the facility, later succeeded by Sterigenics U.S., LLC. When Griffith Foods sought defense from their insurer, National Union Fire Insurance Company declined, citing the pollution exclusion clause in the CGL policy.
The pollution exclusion in CGL policies denies coverage for "bodily injury or property damage arising out of the discharge, dispersal, release, or escape" of pollutants like chemicals and gases. Policyholders argued that emissions permitted by the Illinois Environmental Protection Agency shouldn’t fall under this exclusion. However, the Illinois Supreme Court clarified that permits don’t affect emissions' classification as pollution, emphasizing strict adherence to contract terms without adding conditions.
Implications for Industry Stakeholders
Justice Cunningham highlighted that a permit wouldn’t alter emissions' characterization as pollution, as the original intent of pollution exclusions was to mitigate financial risks associated with environmental litigation. This ruling, which contradicts earlier Illinois Appellate Court decisions, reinforces the essential role of these exclusions in underwriting and risk management practices.
Industry players like Zurich American Insurance Company and Swiss Re Corporate Solutions, along with several associations, supported National Union through amici briefs. They stressed the necessity of maintaining the integrity of pollution exclusions, critical for regulatory compliance and defining policy boundaries.
For policyholders managing environmental claims from permitted emissions, this ruling underlines the importance of dedicated pollution liability policies. Insurers benefit from clarified application of pollution exclusions, ensuring consistent interpretation of policy terms regardless of governmental permits.