Draft Coverage Opinion Letter

---
name: draft-coverage-opinion-letter-cgl-toxic-tort
task_id: insurance/draft-coverage-opinion-letter
description: Agents drafting a CGL coverage opinion letter for a toxic tort claim should begin with the relevant policy terms and claim summary, then analyze the coverage issues methodically, including the duty to defend, reservation of rights, and any independent-counsel considerations.
activates_for: [planner, solver, checker]
---

# Skill: Draft Coverage Opinion Letter — CGL Policy Analysis for Toxic Tort Claim

## 1. Subject-matter triage

- Identify the governing jurisdiction, the named insured, the tendered action, the policy period, and every potentially implicated policy form or endorsement before analyzing coverage.
- Determine whether the claim is a single incident, a series of incidents, or a continuing-exposure matter; if more than one occurrence, claimant, location, policy period, or damage theory may be implicated, enumerate the set expressly before analysis.
- Separate bodily injury allegations, property damage allegations, cleanup/remediation theories, contractual indemnity theories, and any recall or mitigation costs so each can be analyzed under the correct grant, exclusion, and limit structure.
- If the record includes prior notices, claims history, engineering findings, or supply-chain documents, use them to test knowledge, timing, allocation, and reservation-of-rights issues.

## 2. Failure modes the skill is correcting

- The letter begins with conclusions rather than the policy language, claim posture, and jurisdictional rule set that control the analysis.
- The letter treats the complaint as self-contained and ignores the tender materials, report history, or contract documents that can change the duty-to-defend or exclusion analysis.
- The letter fails to address the policy’s limits architecture, including per-occurrence limits, aggregates, deductibles, and any endorsement that narrows or redefines the operative coverage grant.
- The letter discusses coverage in the abstract without tying each proposition to controlling authority in the governing jurisdiction.
- The letter reaches a yes/no coverage answer without separately analyzing defense obligations, reservation of rights, late notice, known-loss or loss-in-progress issues, and independent-counsel conflicts.
- The letter assumes a pollution-type loss is automatically excluded or automatically covered, rather than applying the jurisdiction’s actual treatment of sudden release, accidental discharge, and traditional environmental contamination.
- The letter ignores contractual liability, products-completed operations, or products-recall provisions that can shift the result even where the complaint is framed as a tort suit.

## 3. Legal frameworks / domain conventions that apply

- Coverage opinion letters should move from policy summary to factual summary to issue-by-issue coverage analysis to recommendation, using a formal insurer-side advisory tone.
- Duty to defend is ordinarily tested under the jurisdiction’s complaint-to-policy comparison rule, often described as the eight-corners rule, subject to the local treatment of extrinsic facts; cite the controlling state authority for that standard.
- Duty-to-indemnify analysis should be separated from the defense analysis and anchored to the alleged loss facts, not merely the pleadings.
- Pollution exclusions, discharge exclusions, and similar contaminant provisions must be read in light of the jurisdiction’s controlling precedent on accidental release versus traditional environmental pollution; cite the leading case and any relevant policy form language.
- Known-loss and loss-in-progress doctrines require a pre-inception knowledge inquiry focused on the specific loss, not merely general awareness of a risk; cite the governing common-law rule or policy wording.
- Expected-or-intended injury exclusions turn on the jurisdiction’s standard for intent or expectation, which may be subjective, objective, or hybrid; cite the operative authority and distinguish foreseeability from intention.
- Number-of-occurrences analysis should follow the governing jurisdiction’s cause-based, effect-based, or continuous-trigger approach as applicable; this can affect limits, deductibles, and aggregate erosion.
- Products-completed operations provisions and any products-related aggregate should be analyzed separately from the general aggregate and tied to whether the claim concerns goods, work, completed work, or post-sale exposure.
- Contractual liability exclusions should be read together with any insured-contract exception, additional-insured endorsement, or assumption-of-liability wording that may restore coverage.
- Product recall, recall-cost, or mitigation exclusions should be separated from defense costs, bodily injury damages, and property damage damages; cite the controlling policy wording and any relevant authority on recall-type losses.
- Notice provisions and late-notice defenses must be analyzed under the jurisdiction’s notice-prejudice rule, if any, and the insurer’s burden, if any, to show prejudice.
- Punitive-damages insurability, where implicated, must follow governing-state public policy or express-policy rules, not generalized assumptions.
- Independent counsel analysis should follow the jurisdiction’s conflict-counsel doctrine, including whether a coverage position creates a material conflict between insurer-appointed counsel and the insured’s defense interests.
- Reservation-of-rights letters should be tailored to the actual defenses present, identify the specific provisions reserved, and be issued in a timely manner consistent with governing law.

## 4. Analytical scaffolds

1. State the policy period, named insured, applicable forms and endorsements, per-occurrence limit, aggregate limit(s), deductible or SIR, and any exclusions or special terms that appear facially relevant.
2. Summarize the underlying suit, tender posture, reported loss facts, and any prior claims, notices, inspections, or engineering findings that bear on coverage.
3. Identify the potentially covered injury or damage theories and compare the complaint allegations to the insuring agreement and all potentially applicable exclusions under the governing complaint-comparison rule.
4. If multiple claimants, locations, release events, policy periods, or damage theories are implicated, enumerate each one and analyze coverage for each separately rather than using a blended pass.
5. Pollution or release exclusion: apply the jurisdiction’s controlling authorities and the exact policy wording; distinguish isolated accidental discharge from environmental contamination or gradual migration; and address whether the alleged valve failure or chemical release falls within or outside the exclusion.
6. Known-loss / loss-in-progress: use pre-tender documents, reports, complaints, and internal communications to assess whether the insured knew of the specific loss before inception; distinguish knowledge of a problem from knowledge of a covered claim.
7. Expected-or-intended injury: assess whether the insured subjectively expected or intended the alleged injury, if that is the governing test; if the jurisdiction uses a different test, apply that rule and identify the evidence bearing on intent.
8. Occurrence and allocation: determine the jurisdiction’s test for counting occurrences, and explain how the characterization affects per-occurrence limits, deductibles, and any aggregate or attachment point.
9. Products-completed operations: determine whether the alleged injury arises out of products, completed work, or post-delivery exposure; then evaluate whether a separate aggregate or endorsement changes the limit analysis.
10. Contractual liability and supply-chain documents: identify any assumption-of-liability or indemnity provisions; assess any insured-contract exception; and explain whether the contract shifts the defense or indemnity picture.
11. Recall / mitigation costs: identify any recall-like, replacement, service, or mitigation costs in the tender or complaint; test them against any recall exclusion or definition; and distinguish excluded business expenses from potentially covered damages.
12. Late notice: map the notice timeline, the insured’s stated explanation, and any governing prejudice requirement; state the likely effect on coverage if prejudice must or must not be shown.
13. Punitive damages and extra-contractual exposure: if pled or demanded, analyze insurability under the governing law and policy wording; state whether such relief affects defense or indemnity obligations.
14. Reservation of rights and independent counsel: identify every live coverage defense, assess whether the insurer can defend subject to reservation, and state whether the coverage position creates a conflict requiring or favoring independent counsel.
15. Close with a recommendation that states the defense position, the indemnity outlook, the reserved defenses, and the concrete next steps for the claims team.

## 5. Vertical / structural / temporal relationships

- Distinguish inception-date facts from post-inception developments; the timing of the release, notice, suit, and report can determine whether the claim sits inside or outside the policy period and whether known-loss applies.
- Distinguish contemporaneous operational events from later litigation framing; a complaint may plead a single accident, but the record may reveal a continuing release, multiple exposure windows, or different damage categories.
- Distinguish primary coverage terms from endorsement modifications; an endorsement can override the base form, narrow the grant, alter definitions, or shift an exclusion analysis.
- Distinguish duty-to-defend triggers from indemnity triggers; a potentially covered allegation may require a defense even if ultimate indemnity is doubtful.
- Distinguish cost categories over time; investigation, defense, remediation, recall, replacement, and judgment amounts may sit in different coverage buckets and at different layers of the policy architecture.
- Distinguish insured conduct, contractor conduct, and third-party conduct where the supply agreement or claim history may change attribution, occurrence counting, or intent analysis.

## 6. Output structure conventions

- Write a formal coverage opinion letter in polished legal style, addressed to the decision-maker or claims audience reflected in the assignment.
- Begin with an executive summary that states the defense recommendation and the principal coverage risks in neutral, lawyerly terms.
- Include a factual background section that succinctly summarizes the policy, the tendered action, and the key extra-pleading materials that matter to coverage.
- Follow with an issue-by-issue analysis section using headings that track the operative coverage questions rather than a generic list of doctrines.
- For every legal proposition, cite the controlling authority by name and section, or the leading case / rule / statute applicable in the governing jurisdiction.
- Where multiple insureds, claims, periods, or damage categories are in play, organize the analysis by item so each receives a discrete coverage conclusion.
- Conclude with a recommendation section that states whether to defend, defend under a reservation of rights, decline, or seek further information; identify the specific defenses to reserve; and give a practical next-step list with timing tied to the claims process or litigation posture.
- Keep the tone defensive, precise, and complete; do not hedge away from a conclusion, but identify any factual assumptions that materially affect it.