Travelers Property Casualty Co. v. Washington Shoppes LP (Dry-Cleaner PCE Contamination Coverage Dispute)
Travelers Property Casualty Company of America and St. Paul Fire and Marine Insurance Company sued Washington Shoppes LP and property owner The Broadbent Company in Indiana state court, seeking a declaration that pollution-exclusion clauses in their policies bar coverage for remediation costs at an Indianapolis shopping center contaminated by a former dry-cleaning tenant. Sunrise Dry Cleaners operated at the site from 1987 to 1996, and subsequent testing found tetrachloroethylene (PCE) and its degradation byproducts in soil and groundwater beneath the property.
Why it matters
Legacy dry-cleaner contamination is one of the most common environmental liabilities lurking in older strip-mall and shopping-center portfolios, and this case shows insurers moving proactively to disclaim coverage rather than waiting to be sued for it — shifting remediation-cost risk back onto the property owner even where the contamination predates their ownership. Owners and buyers of retail centers with any pre-1990s dry-cleaning, auto-service, or similar tenant history should confirm Phase I/II environmental assessments are current and should not assume a general liability or pollution policy will actually respond before a claim is filed.
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