In Dyncorp v. Certain Underwriters at Lloyd's , London, No. 08C-09-218, 2009 Del. Super. LEXIS 412 (Del. Super. Ct. Nov. 9, 2009), the court considered whether a duty to defend arose in several underlying suits for damage caused by aerial spraying over Colombia.

   Pursuant to a contract with the United States government, the insured conducted aerial spraying over Colombia to eradicate drug crops.  Plaintiffs in the underlying cases sought damages from the insured for bodily injuries, property damage and damage to natural resources as a result of the aerial spraying operations.  When Lloyd's refused to defend under its aviation liability policies, the insured sued.

   On the insureds' motion for partial summary judgment, the court determined that the underlying actions stated a claim against the insured, triggering Lloyd's duty to defend.  The policies provided a defense for suits involving claims that alleged "Bodily Injury" or "Property Damage" arising out of an "Aircraft Hazard."  "Aircraft hazard" was defined as liability arising out of the operation of aircraft that was not owned by the insured.  The policies specifically referenced "crop dusting" and "spraying" by aircraft, but provided coverage only for declared aircraft spraying operations.  Based on these provisions, the policies provided a defense for bodily injury or property damage arising out of aircraft hazards if two conditions were met: (1) the aircraft was not owned by the insured; and (2) spraying was declared to the insurers.

   Both conditions were met here.  First, the insured had previously informed Lloyd's it did not own the aircraft.  Second, the insured provided documentation to show that the spraying operations were declared to Lloyd's. 

   Further, the additional insured provision of the policies actually referred to the contract with the government by excluding coverage for such operations for additional insureds.  Lloyd's therefore argued that the additional insured provision also excluded coverage for spraying operations for the insureds.  The court disagreed.  If Lloyd's meant to exclude all spraying coverage from the policies, it could have done so clearly and unambiguously in the exclusions applicable to all insureds and not in a sentence in a provision regarding additional insureds.

   Lloyd's further argued coverage was excluded under the pollution exclusion.  The court rejected this argument, as well.  First, the additional insured provision specifically referenced spraying under the contract.  Second, the policy contained a separate exclusion for undeclared "crop dusting" and "spraying."