A Texas appellate court overturned a prior $25 mn judgment awarded to Exxon Mobil Corp. and ExxonMobil Oil Corp. in a dispute with Lexington Insurance Co., following a 2013 refinery explosion.
The case centered on coverage for three Brock Services employees injured during maintenance work at the refinery.
Brock, which provided scaffolding services, had workers on-site at the time of the April 2013 incident. After receiving workers’ compensation, the injured employees filed personal injury claims against Exxon.
Exxon argued that it qualified as an additional insured under an umbrella policy issued by Lexington and claimed the insurer owed $25 mn toward a $5 mn settlement and legal defense costs.
On April 3, the Court of Appeals for the Ninth District of Texas in Beaumont reversed the lower court decision, which had ruled in favor of Exxon.
The court stated that the Brock employees, as statutory employees under section 406.123 of the Texas Labor Code, were working at Exxon’s jobsite and participating in Exxon’s Owner Controlled Insurance Program. The Lexington umbrella policy excluded coverage for Exxon’s own employees.
We reverse and render judgment that the Exxon entities recover nothing, as their claim is excluded under the policy, and Lexington had no obligation to defend or indemnify under the umbrella policy.
Justice Jay Wright
American International Group, Inc., Lexington’s parent company, did not immediately respond to requests for comment.
In a separate case last year involving AIG subsidiaries, the Hawaii Supreme Court held that pollution exclusions in a commercial general liability policy applied to greenhouse gases.
The court also found that an incident may still be considered accidental, even when the insured was aware of the associated risks, according to BestWire.
Aloha Petroleum brought the suit, seeking defense against lawsuits filed by the city and county of Honolulu and Maui County. These lawsuits addressed environmental harm linked to climate change.
Aloha Petroleum’s case named National Union Fire Insurance Co. of Pittsburgh, PA, and American Home Assurance as defendants.
Similar claims have been filed against 20 fossil fuel-related companies, including Exxon, Shell, Chevron, BP, and ConocoPhillips, for allegedly failing to warn the public about the risks of fossil fuel use.
