Last year we prepared an alert concerning a case in Wisconsin regarding “manure” as a pollutant as it pertains to coverage for a loss under a farm’s general liability insurance policy. At the end of 2014, the decision previously rendered by an appellate court in Wisconsin was reversed by the Wisconsin Supreme Court. The Wisconsin Supreme Court in Wilson Mutual Insurance Co. v. Falk, 2014 WI 136 (Wis. 2014) held that manure is a “pollutant” under the standard farm general liability insurance policy. This is a precedent-setting case in Wisconsin and may be instructive for other jurisdictions.
The Wisconsin Supreme Court in Wilson Mutual found that manure spread onto fields which ends up contaminating the wells of neighbors is a “pollutant." The Falks, dairy farmers, fertilized their fields with manure from their cow herd. They applied the manure to the fields pursuant to a nutrient management plan. Sometime thereafter, they were advised by the Department of Natural Resources (DNR) that the neighbor’s wells were contaminated from the manure. At the time, the Falks were insured with a farmowner policy providing coverage for property damage and bodily injury; however, coverage was excluded for damage or injury that resulted from the “actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of ‘pollutants’ into or upon land, water, or air.” “Pollutant” was defined to be solid, liquid, or gaseous irritant or contaminant, including “waste.” Further defined, materials that are recycled, reclaimed, or reconsidered could be considered “waste” under the policy. The appellate court earlier last year found that manure was not a pollutant and found that the farm’s standard liability policy provided coverage for the claims of damage by the neighbors. The Supreme Court reversed that decision.
While the appellate court looked more generally at the nature of manure as a substance used by dairy farmers, finding that it was not unambiguously a pollutant, the Wisconsin Supreme Court focused on the nature of the manure at the point it entered the neighbor’s wells. The court found that undoubtedly the manure at that point was waste, meeting the definition of a “pollutant.” The court noted that the occurrence at issue which gave rise to the claim, was not the spreading of the manure, but was the manure seeping into the wells.
Since all policies are not written the same, it is important that you determine how your particular policy defines “pollutant” and how the policy exclusions might apply to your operation. Review the risks and hazards of your farm and talk to your insurer or agent so that they can ensure that you are fully protected. They may recommend additional coverages, including specialized pollution coverage.