"US fossil fuel firm sues insurer for refusing to cover climate lawsuit", 30 Aug 2022

A fossil fuel firm is suing its insurer for refusing to cover a climate lawsuit in a case that could affect the wider industry’s ability to defend itself from litigation.

Aloha Petroleum, a subsidiary of the US-based Sunoco, filed a claim against AIG’s National Union Fire Insurance Company of Pittsburgh earlier this month, arguing it had failed to protect Aloha from the mounting costs of defending climate-related claims by local governments in Hawaii.

According to documents filed in the latest lawsuit, Aloha has already incurred more than $880,000 (£750,000) in defence costs, and expects these to grow significantly as litigation progresses. Its insurance company will not pay out.

The lawsuit follows another, filed by the insurance company Everest in June, which is asking Massachusetts superior court to make a similar decision about whether coverage can be denied to Gulf Oil.

These are some of the first disputes over insurance coverage for climate crisis litigation to be heard in the courts. Both insurance companies say climate litigation is covered by exclusions for “pollution” in their clients’ general liability policies. If they succeed, the fossil fuel firms could be on the hook for millions of dollars in legal fees, in addition to any future damages awarded in court.

...The lawsuits underlying Aloha’s claim were brought by local governments in Hawaii against companies including Sunoco, ExxonMobil and Shell. Honolulu’s case alleges the big oil firms “engaged in a coordinated, multifront effort” to deny the threat posed by global heating, to discredit the science of the climate crisis, and to deceive the public “about the reality and consequences of the impacts of their fossil fuel pollution”.

...[Mary Sweeters, a senior strategist for the Insure Our Future campaign] said lawsuits such as those brought by Aloha were an indicator that pressure was mounting on insurers for underwriting fossil fuel projects...