Is your underwear insured?

Underwear Insurer to Clean up after Manufacturer

Jan. 10 -- An underwear insurer will pay $42.5 million to clean up hazardous waste contamination at four industrial facilities in Michigan, New Jersey and Tennessee, resolving a 2005 lawsuit over environmental insurance coverage.

American International Specialty Lines Insurance Co. Inc., a member company of American International Group Inc., reached a settlement with the federal government to address contamination at the sites, formerly owned by Fruit of the Loom Inc. The clothing company filed for bankruptcy in 1999.

The U.S. Department of Justice, on behalf of the U.S. Environmental Protection Agency, sued AISLIC in 2005 to recover environmental cleanup costs from two trusts the bankruptcy court set up to distribute Fruit of the Loom’s remaining assets, including its environmental insurance policies.

AISLIC agreed to pay an initial $30 million plus interest from May 15 and make ten annual payments of $1.25 million to the Fruit of the Loom trusts.