AIG Sued by Aloha Petroleum in Climate Litigation Dispute

AIG’s National Union Fire Insurance Company has been sued by Sunoco subsidiary Aloha Petroleum for refusing to cover the costs of defending climate-related claims by local governments in Hawaii.

It’s thought that this case could set a precedent as to whether firms are protected against climate damage claims, as more insurers seek to refuse cover for climate litigation of this kind.

Earlier this year, Everest faced a similar lawsuit concerning whether its coverage could be denied to fossil fuel firm Gulf Oil.

Documents from the new Aloha case suggest that the company has already incurred more than $880,000 in defence costs, and expects these to grow significantly as litigation progresses.

Aloha argues that its insurance policy with AIG specifically provides cover for ‘products hazard,’ and should apply to climate change lawsuits.