Pollution Exclusion Bars Coverage of Chinese Drywall Claims, 11th Circuit Affirms

ATLANTA — Pollution exclusions in insurance policies sold to a homebuilder and building materials supplier apply to damage caused by Chinese drywall, a federal appeals court has ruled in affirming that coverage is unavailable for drywall-related claims filed against the companies.

In a Jan. 3 decision, the 11th Circuit U.S. Court of Appeals held that under both Florida and Massachusetts law, the policy provisions relieve insurers of their obligation to defend or indemnify American Building Materials and homebuilder KB Home Inc. against suits alleging damage caused by sulfur gases emitted from the drywall.

Granite State Insurance Co. and New Hampshire …