HNRK Coverage Corner

This week at the Coverage Corner, we examine a Second Circuit decision that wades into hot-button topic:  liability coverage for environmental claims involving PFAS (colloquially known as “forever chemicals”).  In a summary ordered issued on May 4, 2026, in Town of Harrietstown v. Westchester Fire Ins. Co., Case No. 22-253-cv, the Second Circuit affirmed a decision from the Northern District of New York, granting summary judgment to the insured on its claim for defense costs.  We wrote about the district court’s decision in an article in Chambers’ 2026 Insurance & Reinsurance Global Practice Guide surveying trends and developments in New York insurance law.

The coverage dispute arose from a PFAS contamination claim brought by the New York State Department of Environmental Conservation against the Town of Harrietstown, which operates Adirondack Regional Airport in upstate New York.  The town sought coverage under its CGL policy.  After initially providing a defense subject to a reservation of rights, the insurers disclaimed coverage, invoking the policy’s pollution exclusion. 

At issue was the interplay of two provisions in the policy’s pollution exclusion. First, the policy excluded coverage for claims “directly or indirectly occasioned by, happening through or in consequence of . . . pollution and contamination of any kind whatsoever,” “unless caused by or resulting in a crash fire explosion or collision or a recorded in-flight emergency causing abnormal aircraft operation.” Separately, the policy’s “Combined Claims” provision stated that the insurers “shall not be required to defend . . . a claim or claims covered by the policy when combined with any claims excluded,” but would only reimburse the insureds for that portion of its defense costs that “may be allocated to the claims covered by the policy.”

It was undisputed that one alleged source of contamination at the Airport was firefighting foam that was used in response to crashes or similar events, and therefore, the pollution exclusion’s exception for pollution caused by “a crash fire explosion” was at least potentially triggered.  The motion court granted summary judgment to the insured, holding that the duty to defend was triggered.

The insurers’ principal argument on appeal focused on the policy’s “Combined Claims” provision, which they claimed was triggered because the underlying contamination claim involved a mix of covered and uncovered causes, precluding defense coverage for any non-covered causes of loss. Accordingly, the insurers contended that they should have no duty to pay any defense costs until the insured could establish a basis to allocate a portion of the defense costs to a covered cause of loss.

The Second Circuit rejected this argument, holding that the insurers misconstrued the meaning of the term “claim,” as used in the policy.  The policy did not provide an express definition, but Second Circuit had “repeatedly held that a ‘claim,’ in the insurance context, constitutes ‘a demand for specific relief owed because of alleged wrongdoing.’” (Citing Windham Solid Waste Mgmt. Dist. v. Nat’l Cas. Co., 146 F.3d 131, 134 (2d Cir. 1998)).  Under this standard definition, the court held that there was only one “claim” against the insured—the environmental contamination proceeding brought by the NYSDEC.  And the fact that this one claim may have alleged multiple causes of loss did not implicate the “Combined Claims” provision.  Therefore, the insurers were obligated to provide a complete defense to the town in the NYSDEC proceeding “unless and until such time as the Insurers can establish with certainty that the NYSDEC claim falls outside of an exception of the Pollution Exclusion clause.”

This decision underscores the breadth of a CGL insurer’s duty to defend under New York law, which is triggered whenever there is any possibility of coverage.  Given the recent spate of PFAS-related claims, we can expect policyholders to cite this decision in the future in support of claims for defense coverage.