A federal appeals court ruled AIG doesn’t owe coverage for EMF radiation claims, backing its broad exclusion clause and offering a clear win for commercial insurers.
In a decision handed down July 9, 2025, the US Court of Appeals for the Seventh Circuit sided with National Union Fire Insurance Company of Pittsburgh, PA, and Illinois National Insurance Company - subsidiaries of AIG - against transformer manufacturer Hammond Power Solutions, Inc. The court affirmed that AIG had no duty to defend or indemnify Hammond in a personal injury lawsuit tied to electromagnetic field (EMF) radiation.
The ruling turns on a straightforward but significant question: does EMF radiation fall under a policy exclusion that bars coverage for injuries arising from “any form of radiation”? The court said yes - unequivocally.
From 2017 to 2022, Hammond Power purchased commercial general liability policies from AIG. Those policies covered bodily injury and property damage but included what’s known as the “Radioactive Matter Exclusion.” That exclusion added a key limitation: no coverage for injuries caused by “radioactive matter or any form of radiation.”
In 2022, two New York residents, Dragan Micic and Lidija Bubanja, filed a lawsuit against Hammond, claiming electric transformers installed near their bedroom exposed them to dangerous EMF radiation. The complaint linked the exposure to cancer and other injuries. Hammond asked AIG to step in and defend the suit. The insurer declined, citing the radiation exclusion.
Hammond sued, arguing that the exclusion was ambiguous and shouldn’t apply to EMF radiation, which it claimed was fundamentally different from the kind of radioactive exposure typically associated with such policy language. But both the federal district court in Wisconsin and now the Seventh Circuit saw no ambiguity.
The appellate panel ruled that the phrase “any form of radiation” was as broad and clear as it sounds. EMF radiation, they wrote, is “radiation” within the plain meaning of the term, and the exclusion’s use of “any form” left little room for argument. The court declined to apply interpretive doctrines that might have narrowed the exclusion, stating that no ambiguity existed in the first place.
The judges also dismissed arguments based on the title of the clause - “Radioactive Matter Exclusion” - noting that a heading doesn’t override clear wording in the body of a contract. And they rejected hypothetical concerns raised by Hammond that the exclusion could stretch to absurd extremes, like sunburn or microwave exposure. Those situations weren’t before the court, the judges said, and didn’t change the plain reading of the policy.
The decision reinforces a key point for insurance professionals: when exclusion language is clear, courts will enforce it as written. For claims handlers and underwriters, the message is familiar but important - don’t underestimate the power of wording, especially when it’s as sweeping as “any form of radiation.”
For policyholders, especially in industrial sectors, the case underscores the need to read exclusions carefully and consider whether additional endorsements are needed to close potential gaps. The court made clear that if coverage for EMF-related claims was essential to Hammond’s operations, it should have negotiated for it up front.
The case - Hammond Power Solutions, Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, and Illinois National Insurance Company - adds weight to the enforceability of broad exclusions in commercial liability policies. And for insurers, it’s a timely reminder that clarity in drafting can win the day in court.
