A recent Missouri Court of Appeals decision provides helpful precedent for liability insurers facing legacy environmental claims and class actions. The court strictly construed the policy period, concluding that claims based on conduct or injury occurring after the expiration of the policy were not covered, even if the underlying contamination began earlier.
In Certain Underwriters at Lloyd’s London v. Northrup Grumman Corporation, –– S.W.3d ––, 2025 WL 3072808 (Mo. App. Nov. 4, 2025), the underlying class action alleged that waste containing trichloroethylene (TCE) and other contaminants migrated from a site previously operated by Litton Industries (later acquired by Northrop), contaminating private wells in the area. The federal court dismissed most of the claims, and the parties settled the remaining claims.
Northrop sought coverage for the settlement under a Lloyd’s policy in effect from 1964-1967 and a Wausau policy in effect from 1969-1971. Both policies covered “all sums which the Insured shall become legally obligated to pay as damages because of either ‘property damage’ or ‘personal injury.’” Based on the policy language quoted in the opinion, neither policy specified what conduct needed to happen during the policy period to trigger coverage. The class action plaintiffs alleged that Northrop, after acquiring Litton in 2001, failed to warn, monitor, or remediate TCE contamination, resulting in injuries to property owners from 2004 onward.
The Missouri Court of Appeals affirmed the trial court’s conclusion that the insurers had no duty to defend or indemnify Northrup. The court explained that the class was “people who were harmed from 2004 through the present,” and their claim was “that Northrup knew as of at least 2004 that TCE contamination had spread, but did not warn the public.” There was thus no potential coverage under the 1960s/1970s-era policies. Despite Northrup’s efforts to tie the claims to the original contamination, the court explained that “[t]he London Policy and Wausau Policy only provide coverage for injury or damage that occurs during the policy period,” and “[t]he Class Action Plaintiffs alleged that they were injured from Northrup’s actions when Northrup failed to monitor the spread of TCE, failed to warn about TCE, failed to remediate TCE, and failed to stop the spread of TCE,” all of which “occurred outside the policy period.”
This decision underscores that coverage is strictly tied to the policy period—a helpful precedent in defending against attempts by policyholders to expand coverage for legacy liabilities.