INA ORDERED TO PROVIDE $5 MILLION IN POLLUTION CASE

INA ORDERED TO PROVIDE $5 MILLION IN POLLUTION CASE

Insurance Co. of North America (INA) was ordered to pay $5 million in pollution coverage to Williams Pipeline Co. last week.

INA, a former unit of Cigna Corp., supplied an excess liability policy to Williams from Dec. 31, 1984, through Dec. 31, 1985. The policy excluded pollution coverage for pollution damage taking place for more than 72 hours.A jury said the groundwater damage in question took place within a three- day period, according to Williams' attorney.

A U.S. District Court in Tulsa, Okla, ordered INA to provide the insurance to Williams, which sought to recover costs spent to investigate and clean up groundwater contaminated by unleaded gasoline that leaked from a 1.5 million gallon above-ground storage tank in Sioux Falls, S.D.

Williams spent more than $7 million to investigate and clean up the site in addition to paying landowner claims and building an elementary school to replace one contaminated by the gasoline leak, said Mark Klein, counsel for Williams at Anderson Kill Olick & Oshinsky in New York.

INA had refused to pay, citing the provision that limits pollution insurance to events that occur within "an identifiable 72-hour time period," Mr. Klein said.

Some underwriters at Lloyd's of London use a similar 72-hour clause and also require insureds to report incidents of pollution within the same period, the attorney said.

Mr. Klein said evidence from groundwater hydrologists, metallurgists and organic chemists was used to trace the origins of the leak within a 72-hour time period occurring around Sept. 22, 1985. Although the tank was primarily used for storing military jet fuel, unleaded gasoline was added in early September 1985, which helped experts hired by Williams to pinpoint the start of the leak, he said.

Maura Ciccarelli, a Cigna spokeswoman, said the company's attorneys will ask the judge to either set aside or reverse the jury decision. Cigna believes it is not liable for damages because of its pollution exclusion.

Williams is a common carrier petroleum pipeline that moves other companies' products through its pipeline that stretches 10,000 miles cross-country. The Sioux Falls terminal is one of 35 terminals in 10 Midwestern states.

Sioux Falls fire officials discovered contamination at the Sioux Falls site May 1986, when an elderly woman smelled gas and called firemen who immediately evacuated her from her home. Her house sits 200 feet from Williams' terminal.

Also evacuated was an elementary school some 600 feet away from the terminal where Williams' above-ground tank, 85 feet in diameter, sprung the leak. Williams built a new school miles away from the terminal.