Insurer That Paid $800K On Home Fuel Oil Spill Cannot Subrogate: Court

A home insurer that paid about $800,000 for an oil spill claim cannot sue the fuel companies in the insured’s name because the homeowner had declared bankruptcy, the Court of Appeal for Ontario ruled recently. Art and Wendy Douglas lived near Kingston. Each declared bankruptcy, although at different times. In early 2008, a shipment of fuel oil to their home spilled.
Their homeowner’s policy with State Farm covered “accidental escape” of fuel oil. Ultimately, cleaning up the pollution cost State Farm (the Canadian operations of which are now owned by Desjardins) about $800,000.