Insurer Claims Policy Does Not Cover Diacetyl Claim Damages

An insurer that issued commercial umbrella policies to a company that makes flavorings ingredients, including those used in butter-flavored microwave popcorn, is seeking a declaration that it has no obligation under those policies to defend or indemnify the company in lawsuits alleging respiratory injury from exposure to diacetyl. Continental Cas. Co. v. Citrus & Allied Essences Ltd., No. 650548/2011 (N.Y. Sup. Ct., filed February 28, 2011). More than 50 diacetyl lawsuits have apparently been filed against the ingredients supplier by individuals alleging workplace exposures. The insurer contends among other matters that it was not timely notified about some of the suits, the injuries did not occur during the policy coverage period, pollution exclusions preclude coverage, and the insured has settled lawsuits without the insurer’s consent.