The Mississippi Supreme Court overturned a lower court ruling Thursday and ruled that a Markel Corp. unit must provide coverage under its excess policy for a 2014 plant explosion.
On July 28, 2014, an explosion at Omega Protein Inc.’s facility in Moss Point, Mississippi, killed one man and seriously injured several others, according to Thursday’s ruling by the state’s high court in Omega Protein Inc. v. Evanston Insurance Co.
Omega Protein Inc. had entered into a master service contract with Moss Point-based Accu-fab & Construction Inc. to perform welding and other facilitation work at the facility, under which it was required to provide commercial liability insurance that named Omega as an additional insured, the ruling said.
Accu-fab purchased a $1 million primary policy issued by Argo Group International Holdings Ltd. unit Colony Insurance Co. and a $5 million excess policy from Markel unit Evanston Insurance.
Litigation ensued, and Omega and the deceased worker’s estate settled, with Colony contributing $1 million, an amount equal to the applicable policy limits.
Evanston filed a motion for summary judgment, arguing Omega was not an additional insured under the Colony policy and therefore not an additional insured under the excess policy, and that a pollution exclusion in its policy applied. The lower court granted the motion and Omega appealed.
In its unanimous opinion reversing the lower court, the Mississippi Supreme Court said, “Because the pollution exclusion in the (Evanston) insurance contract was ambiguous, it must be construed against the insurer and in favor of the insured, allowing coverage.
“Further, we find the question whether coverage was triggered is governed by the language of the contract and that Evanston has failed to prove there could be no coverage under the excess liability policy,” the court said, in reversing the trial court’s grant of summary judgment and remanding the case for further proceedings.
Attorneys in the case did not respond to requests for comment.
In a case related to Omega’s coverage in the explosion, in 2019 a federal appeals court cited advice provided by the Mississippi Supreme Court and affirmed a lower court ruling in favor of a Swiss Re Ltd. unit in a dispute with Colony.