Oregon Revised Statutes Chapter 465 § 465.480 — Insurance for environmental claims; rules of construction; duty to pay defense

Insurance for environmental claims; rules of construction; duty to pay defense or indemnity costs; contribution; allocation. (1) As used in this section: (a) “Long-tail environmental claim” means an environmental claim covered by multiple general liability insurance policies. (b) “Suit” or “lawsuit” includes but is not limited to formal judicial proceedings, administrative proceedings and actions taken under Oregon or federal law, including actions taken under administrative oversight of the Department of Environmental Quality or the United States Environmental Protection Agency pursuant to written voluntary agreements, consent decrees and consent orders. (c) “Uninsured” means an insured who, for any period of time after January 1, 1971, that is included in an environmental claim, failed to purchase and maintain an occurrence-based general liability insurance policy that would have provided coverage for the environmental claim, provided that such insurance was commercially available at such time. A general liability insurance policy is “commercially available” if the policy can be purchased under the Insurance Code on reasonable commercial terms. (2) Except as provided in subsection (8) of this section, in any action between an insured and an insurer to determine the existence of coverage for the costs of investigating and remediating environmental contamination, whether in response to governmental demand or pursuant to a written voluntary agreement, consent decree or consent order, including the existence of coverage for the costs of defending a suit against the insured for such costs, the following rules of construction shall apply in the interpretation of general liability insurance policies involving environmental claims: (a) Oregon law shall be applied in all cases where the contaminated property to which the action relates is located within the State of Oregon. Nothing in this section shall be interpreted to modify common law rules governing choice of law determinations for sites located outside the State of Oregon. (b) Any action or agreement by the Department of Environmental Quality or the United States Environmental Protection Agency against or with an insured in which the Department of Environmental Quality or the United States Environmental Protection Agency in writing directs, requests or agrees that an insured take action with respect to contamination within the State of Oregon is equivalent to a suit or lawsuit as those terms are used in any general liability insurance policy. (c) Insurance coverage for any reasonable and necessary fees, costs and expenses, including remedial investigations, feasibility study costs and expenses, incurred by the insured pursuant to a written voluntary agreement, consent decree or consent order between the insured and either the Department of Environmental Quality or the United States Environmental Protection Agency, when incurred as a result of a written direction, request or agreement by the Department of Environmental Quality or the United States Environmental Protection Agency to take action with respect to contamination within the State of Oregon, shall not be denied the insured on the ground that such expenses constitute voluntary payments by the insured. (d) A general liability insurance policy that provides that any loss covered under the policy must be reduced by any amounts due to the insured on account of such loss under prior insurance may not be construed to reduce the policy limits available to an insured that has filed a long-tail environmental claim, or to reduce those policies from which an insurer that has paid an environmental claim may seek contribution. Such provisions may be a factor considered in the allocation of contribution claims between insurers under subsection (4) of this section. (e) The release of a hazardous substance into the waters of this state, as defined in ORS 196.800, or onto real property owned by a party other than the insured constitutes damage, destruction or injury to property. Any remedial action costs, as defined in ORS 465.200, that an insured incurs as a result of any action taken to cut off a pathway by which a hazardous substance threatens to, or has, migrated, leached or otherwise been released into the waters of this state, as defined in ORS 196.800, or onto real property owned by a party other than the insured are remedial action costs that the insured is legally obligated to pay as damages because of the damage, destruction or injury to such property even though such action also involves the property of the insured. (3)(a) An insurer with a duty to pay defense or indemnity costs, or both, to an insured for an environmental claim under a general liability insurance policy that provides that the insurer has a duty to pay all sums arising out of a risk covered by the policy, must pay all defense or indemnity costs, or both, proximately arising