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Los Angeles — An agency order to clean up pollution, by itself, does not trigger the “damages” clause in the polluter’s liability insurance, a divided state appellate panel has ruled.

The victory for the insurance industry came in Certain Underwriters at Lloyd’s London v. Superior Court, 99 C.D.O.S. 8564, a closely watched case that answers, for the first time, the question of indemnification left open last year when the California Supreme Court ruled that a liability policy creates no duty to defend against an administrative cleanup order.

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