Two tenants of a second-floor unit in an apartment building (condominium) in Florida USA died in their bedroom, after inhaling carbon monoxide gas whilst asleep. The gas was believed to have come from a car in the unit’s garage. It seeped into the air-conditioning system of the unit and entered the bedroom through the system’s ducts or vents. The liability insurance claim failed because of a pollution exclusion in the policy.

The Homeowners Association (HOA) in control of the condominium was sued for wrongful death. The insurers approached the court for a declaration that they owed no duty to defend the action on behalf of the HOA.

The insurance policy contained a Total Pollution Exclusion which included a Building Heating, Cooling and Dehumidifying Equipment Exception.

According to the exclusion, the policy does not cover bodily injury which would not have occurred but for ‘the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants” at any time’. Carbon monoxide is a pollutant under the policy.

The exception provides that the exclusion does not apply to bodily injury if sustained within the insured’s building caused by smoke, fumes, vapour or soot produced by or originating from equipment that is used to heat, cool or dehumidify the building.

The court rejected the HOA’s argument that the carbon monoxide fell within the exception on two bases. Firstly, the State Complaint filed by the HOA did not allege that the carbon monoxide was produced by or originated from the building equipment (it stated that the carbon monoxide was believed to have come from the car). Secondly, the carbon monoxide did not originate from the air-conditioning ducts or vents merely because it travels through them.

The exception did not apply, and the policy did not provide cover. The court order can be accessed here.