Government permits do not shield policyholders from pollution exclusions in CGL policies, the Illinois Supreme Court ruled on January 23, 2026.
The decision in Griffith Foods International, Inc. v. National Union Fire Insurance Company of Pittsburgh, PA resolves a question that had divided courts for years - and delivers a clear victory for insurers facing pollution-related defense demands.
The case traces back to mass tort litigation in Willowbrook, Illinois, where residents claimed that ethylene oxide emissions from a medical-equipment sterilization facility operated by Griffith Foods International, Inc. and its successor, Sterigenics U.S., LLC, had caused cancer and other serious diseases over more than 35 years. When the policyholders turned to their insurer for a defense, National Union Fire Insurance Company of Pittsburgh, PA said no, pointing to the pollution exclusion in their commercial general liability policies.
That exclusion, standard in CGL policies, bars coverage for "bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water."
The policyholders pushed back. They argued that because the Illinois Environmental Protection Agency had issued a permit authorizing the emissions, the pollution exclusion should not apply. Their position relied on the court's earlier decision in American States Insurance Co. v. Koloms, which limited pollution exclusions to "traditional environmental pollution." A permit, they reasoned, created at least enough ambiguity to tip the scales in their favor.
The court was not persuaded.
Justice Cunningham, writing for the majority, found that the exclusion's plain language makes no mention of permitted or authorized pollution. Courts, the opinion stressed, "must not inject terms and conditions different from those agreed upon by the parties." The permit, the court reasoned, did not transform the emissions into something other than pollution—if it had, no permit would have been needed in the first place.
The ruling also addressed the original purpose behind pollution exclusions. Insurers drafted these provisions in response to the enormous expense resulting from the explosion of environmental litigation. Carving out an exception for permitted pollution, the court noted, would undermine the exclusion's very purpose.
In reaching its decision, the court overruled two earlier Illinois Appellate Court decisions - Erie Insurance Exchange v. Imperial Marble Corp. and Country Mutual Insurance Co. v. Bible Pork, Inc. - both of which had found ambiguity in whether permitted emissions qualify as traditional environmental pollution.
The court also pointed out that insurance companies have developed entirely separate pollution liability policies, which allow insurers to assess the risk of costly environmental litigation.
Insurance industry groups rallied behind the insurer, with amici briefs filed by Zurich American Insurance Company, Swiss Re Corporate Solutions Elite Insurance Corporation, the American Property Casualty Insurance Association, the Complex Insurance Claims Litigation Association, the National Association of Mutual Insurance Companies, and the Illinois Insurance Association.
For insurers, this ruling reinforces that the plain language of a pollution exclusion controls - government permits do not create ambiguity or carve out exceptions. Policyholders seeking coverage for environmental claims arising from permitted emissions should look to separate pollution liability policies rather than standard CGL coverage.
