City of Evansville v. United States Fidelity & Guaranty Co., 2012 Ind. App. LEXIS 123

City of Evansville and its Water and Sewer Utility sought coverage under multiple insureds for costs to remediate and prevent future CSOs under general liability policies.
Policies largely cover damages arising from bodily injury or property damage caused by an occurrence during the policy period; Arrowood and Landmark provide ultimate net loss coverage for such events.
Bee Slough, part of Evansville's combined sewer system, experiences CSOs that release diluted sewage into streams during heavy rain; project plans proposed converting Bee Slough into a wetland at a $15 million cost.
The City pursued environmental enforcement actions, LTCP development, and consent decree discussions with EPA/IDEM, arguing the Bee Slough project is remedial to past discharges.
Trial court granted summary judgment for insurers, holding the claims sought future-prevention costs, not damages/occurrence coverage under Cinergy I.
On appeal, the Indiana Court of Appeals affirmed, applying Cinergy I to conclude prevention of future pollution is not an occurrence, thus not within the policies.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Cinergy I precludes coverage when the City seeks future prevention costs	Evansville argues Bee Slough is remedial and may be covered.	Insurers rely on Cinergy I: prevention costs are not triggered by an occurrence.	Cinergy I controls; no occurrence coverage for preventive projects.

Cinergy I, 865 N.E.2d 571 (Ind. 2007) (distinction between remedial and prophylactic remedies in coverage)
Cinergy II, 873 N.E.2d 105 (Ind.Ct.App.2007) (no occurrence where emission-related costs arise from prevention)
Cinergy III, 915 N.E.2d 524 (Ind.Ct.App.2009) (penalties and defense costs not covered without occurrence)
Newnam Manufacturing, Inc. v. Transcontinental Ins. Co., 871 N.E.2d 396 (Ind.Ct.App.2007) (remediation costs not triggered when action concerns prevention of future emissions)