Quote of the Day - Often, the surest way to convey misinformation is to tell the strict truth.
Not surprisingly, the insurance carrier refuses to pay your claim, and sues to rescind the policy.
Sounds logical so far. But hold on, Bessie, that's not the rest of the story.
The Ninth Circuit just issued its opinion in the case, and the insurer lost. The Court ruled that the insurer cannot cancel or rescind the policy. Now, the insurer may be able to sue the insured for breach of contract damages, but it can't cancel the insurance.
It's a matter of public policy, and USEPA regulations (check "Termination"). The regs require insurers to honor all pollution coverage policies, even if there's been a misrepresentation. What's the catch, you ask?
No coverage in the future. Ever. Perhaps not the sternest punishment, but certainly a stiff penalty. Plus, the public policy of cleanup is furthered because (insurance) money will exist to conduct the cleanup.
Thought you had it all figured out in the beginning, didn't you?