Insurer Says Pollution Exclusion Sinks Coverage for Pool Chemical Injuries

A commercial general liability policy with a pollution exclusion does not protect a Virginia homeowners association from lawsuits filed by swimmers alleging they were injured by chemicals discharged into the community pool.

That is the argument made by Philadelphia Indemnity Insurance Co. in a federal court action seeking declaratory judgment that it is not obligated to cover the Harper’s Mill Homeowners Association in Richmond for lawsuits stemming from the alleged chemical discharge by a lifeguard employed by a pool maintenance company.

On June 15, 2022, Harper’s Mill contracted with a swimming pool operating company, SwimMetro Management Inc., to provide services for the community swimming pool. On that day, a lifeguard employed by SwimMetro allegedly failed to make sure the pool’s chemical pumps were working properly and, as a result, a large amount of chlorine and muriatic acid was allegedly discharged into into pool. The chemicals created a further hazardous chemical byproduct upon contact with one another and the water, according to the insurer.

There were patrons in the pool at the time and approximately 15 people have claimed physical and respiratory illness from contact with the pool water. A number of lawsuits were filed in Chesterfield County courts in February alleging negligence by Harper’s Mill for the incident. The suits also allege that SwimMetro is liable.

A doctor at Virginia Poison Center told WWBT-TV that the claimants’ reported symptoms of nausea, cough and shortness of breath are typical of those seen in cases of chlorine exposure.

The commercial general liability policy that Philadelphia Insurance issued to Harper’s Mill contains a pollution exclusion. This exclusion states that the insurance does not apply to bodily injury or property damage arising out of discharge, dispersal, seepage, migration, release or escape of pollutants by any insured, contractors or subcontractors. In addition, the exclusion defines pollutants to mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.

The insurer argues that the chemicals dispersed into the pool are pollutants as defined by the policy, were brought to the site by a Harper’s Mill’s contractor, and were dispersed at Harper’s Mill’s premises. The incident therefore falls within the exclusion and there is no coverage for the claims made in the underlying lawsuits, the insurer contends.

The insurer’s declaratory motion was filed in U.S. District Court for the Eastern District of Virginia in Richmond.