A.Y. McDonald Industries, Inc. v. Insurance Company of North America
Supreme Court of Iowa
475 N.W.2d 607 (1991)
A.Y. McDonald (plaintiff) operated a brass foundry that dumped lead-containing residue on-site until 1983, and later entered a CERCLA consent order with the EPA requiring it to remediate the resulting contamination. A.Y. McDonald sought a declaration that its remediation costs and an assessed civil penalty were covered under its comprehensive general liability (CGL) policies with its insurers (defendants), whose policies covered sums the insured became "legally obligated to pay as damages because of ... property damage." The coverage question was certified from federal district court to the Iowa Supreme Court.
Whether government-mandated cleanup costs constitute "damages" resulting from property damage covered under a comprehensive general liability policy.