A new decision in the long running Siltronic insurance coverage litigation at the Portland Harbor Superfund Site gives new guidance on determining whether a cost should be categorized as a “defense cost” or an “indemnity payment.” The decision also fleshed out some parameters for the independent counsel provision of Oregon’s environmental insurance claims law (“OECAA”).

Classification of Payments

Siltronic’s primary insurer, Wausau, defended the company at the Harbor from 2003 until 2009, at which point it declared its policy limits exhausted and stopped providing a defense. Siltronic’s excess carrier then began paying Siltronic’s defense costs, but it disputed whether the Wausau policies were actually exhausted.