Chinese Drywall and the Thousands of Homes It Has Damaged Is Yet Another Battleground for the Pollution Exclusion

Abstract

The need to rebuild created by Hurricane Katrina and a building boom led to a shortage of drywall, so builders turned to China for additional drywall. Some of this drywall, however, contained a high sulfur content that, when exposed to heat and humidity, causes sulfide gases to be emitted that corrode wiring and appliances, create a foul smell, and have given rise to claims from homeowners about property damage and possible bodily injury. Insurers’ main defense is once again the pollution exclusion, but the absence of what many consider traditional pollution means the pollution exclusion may not apply. Once again, the forum in which the exclusion is being asserted may be the key.