Whitlock asserts that while National Union initially agreed to defend it under a reservation of rights per its “aerial applicator aircraft” policy, the insurer later refused to provide coverage under its aviation Commercial General Liability (CGL) policy in March. The Texas federal court hearing the case stayed the herbicide dispute in September pending resolution of the coverage issue.
Whitlock’s complaint focuses primarily on the CGL policy and challenges several exclusions cited by National Union. These include exclusions for property damage to “that particular part of real property” on which Whitlock performed work, and for damage to property that must be “restored, repaired, or replaced” due to Whitlock’s allegedly incorrect work. Whitlock argues that the damages stemmed from its herbicide application beyond the designated areas specified in the subcontract, rather than from the work itself.
The company also disputes National Union’s reliance on a pollution exclusion, arguing that the term “pollution” is vague and undefined in the policy. Furthermore, Whitlock challenges the insurer’s use of a contractual liability exclusion, which bars coverage for liabilities assumed under contracts, maintaining that exceptions to this exclusion apply because its liability would have existed independent of the subcontract and the subcontract qualifies as an “insured contract.”
