New York Court Holds Radioactive Materials Exclusion Precludes E&O Coverage for Negligent Phase I Report

Nuclear site with businessman holding nuclear sign

Brian Margolies discusses the case Merritt Environmental Consulting Corp. v. Great Divide Ins. Co.

October 30, 2018
Brian Margolies - TLSS Insurance Law Blog

In its recent decision in Merritt Environmental Consulting Corp. v. Great Divide Ins. Co., 2018 U.S. Dist. LEXIS 175527 (E.D.N.Y. Oct. 10, 2018), the United States District Court for the Eastern District of New York had occasion to consider the application of a radioactive materials exclusion in a professional liability policy.

Great Divide’s insured, Merritt Environmental, was hired as an environmental consultant by a bank in connection with a mortgage refinance of a property located in Westchester County, New York. Merritt’s responsibility was to prepare a Phase I environmental report concerning the property, which the bank ultimately relied on in agreeing to the refinance. It was later claimed, however, that Merritt’s report failed to document the full extent of the property’s radium and uranium contamination resulting from its use in the Manhattan Project. Merritt was named in two separate lawsuits as a result of its allegedly faulty report, including one by the bank alleging that Merritt negligently prepared its report.

Mr. Margolies may be contacted at bmargolies@tlsslaw.com



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