Following a 5-to-1 Wisconsin Supreme Court decision, every Badger State dairy and livestock producer should be reviewing its farm's manure handling practices and insurance coverage. Its Supreme Court ruled that, after manure entered groundwater wells, it could be considered a pollutant. That being the case, pollutants were not covered by the insurance policy in question. That development should draw everyone's attention whether or not they live in Wisconsin.
By all accounts, the Washington County, Wis., farm in question was following best management practices when it spread cow manure on its fields. The dairy farm had worked with an agronomist to develop a nutrient management plan that was approved by the county conservation office. After field application, the manure allegedly contaminated drinking water in nearby wells and also allegedly caused a young boy to become ill. That is where the farm's insurer held its ground and Wisconsin's Supreme Court agreed.
"We need to determine only whether manure is a pollutant at the point it entered the injured parties' well," wrote Justice Ann Walsh Bradley of the Wisconsin Supreme Court. "The injured parties suffered no harm until the manure seeped into their wells; therefore, the grant of coverage arose at the point," stated the justices voting in the affirmative, and that was the point on which the insurance carrier argued that a pollution exclusion in the policy's coverage took effect.
"When analyzing whether a pollution exclusion precludes coverage, we first must determine whether the substance - in this case manure - is ambiguously a pollutant within the policy's definition," stated the justices. "We conclude that a reasonable insurer would consider manure that seeped into a well to unambiguously be a pollutant." Hence, the insurance carrier was off the hook in this case, and the farm now has to go it alone in defending its activities.
This ruling should cause all of us with livestock to review our insurance policies. It may be wise to have an attorney evaluate the coverage as well as to ensure your dairy is fully covered . . . because this Washington County, Wis., dairy producer had thought they were insured, and the court ruled that wasn't the case. While this case only applies to Wisconsin, you can bet it will eventually seep out to other jurisdictions, especially because nationwide insurance industry associations considered this case worth the fight.
This editorial appears on page 90 of the February 10, 2015 issue of Hoard's Dairyman.
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By all accounts, the Washington County, Wis., farm in question was following best management practices when it spread cow manure on its fields. The dairy farm had worked with an agronomist to develop a nutrient management plan that was approved by the county conservation office. After field application, the manure allegedly contaminated drinking water in nearby wells and also allegedly caused a young boy to become ill. That is where the farm's insurer held its ground and Wisconsin's Supreme Court agreed.
"We need to determine only whether manure is a pollutant at the point it entered the injured parties' well," wrote Justice Ann Walsh Bradley of the Wisconsin Supreme Court. "The injured parties suffered no harm until the manure seeped into their wells; therefore, the grant of coverage arose at the point," stated the justices voting in the affirmative, and that was the point on which the insurance carrier argued that a pollution exclusion in the policy's coverage took effect.
"When analyzing whether a pollution exclusion precludes coverage, we first must determine whether the substance - in this case manure - is ambiguously a pollutant within the policy's definition," stated the justices. "We conclude that a reasonable insurer would consider manure that seeped into a well to unambiguously be a pollutant." Hence, the insurance carrier was off the hook in this case, and the farm now has to go it alone in defending its activities.
This ruling should cause all of us with livestock to review our insurance policies. It may be wise to have an attorney evaluate the coverage as well as to ensure your dairy is fully covered . . . because this Washington County, Wis., dairy producer had thought they were insured, and the court ruled that wasn't the case. While this case only applies to Wisconsin, you can bet it will eventually seep out to other jurisdictions, especially because nationwide insurance industry associations considered this case worth the fight.
