Travelers is still fighting the smoke and soot battle I last noted in Travelers’ $27 Million Soot and Smoke Case Takes a Turn: The Panel Opinion Has Been Vacated. However, the latest appellate opinion shows the insurer has not changed the law as much as it might like readers to believe.
A federal jury hit Travelers with a $27 million bad-faith verdict in Maxus Metropolitan, LLC v. Travelers Property Casualty Company of America, finding that soot and smoke contamination caused by a fire constituted “direct physical loss or damage.” I noted that verdict in Travelers Guilty of Bad Faith and Loses $27 Million Verdict Over Smoke, Soot, and Ash Dispute.
Travelers appealed, and in August 2025, the Eighth Circuit Court of Appeals upheld that verdict in a strongly worded opinion that confirmed what most of us in property insurance already knew: smoke and soot are covered causes of loss. I noted that opinion in Smoke and Soot Are Covered Causes of Loss, and Smoke, Soot, and Ash Testing Is Important.
Travelers asked for a rehearing, and on November 17, the same three-judge panel issued a revised opinion. 1 The August opinion is no longer valid law. While some headlines suggest this newer version limits policyholder rights, a careful reading shows the opposite. The panel reaffirmed that soot contamination is a form of physical damage under Missouri law.
What the Court Actually Said About Soot
The November opinion again emphasizes that “direct physical loss or damage” includes physical contamination, not just visible or structural destruction. The court rejected Travelers’ argument that microscopic soot does not count unless it can be seen or compromises the building’s structure:
“This goes beyond Missouri law. Soot damage—like asbestos damage and unlike a virus—is both ‘directly material, perceptible, or tangible’ and ‘permanent absent some intervention.’”
That language couldn’t be clearer. The court aligned soot with asbestos, which are forms of contamination that physically alter property and require remediation. It also favorably cited the jury instruction defining covered loss as “physical alteration, physical contamination, or physical destruction.”
In plain terms, the court said: Soot is physical. Soot is tangible. Soot stays until you clean it up. Travelers’ effort to recast “physical loss” as only structural or visible failed.
What Changed—And What Didn’t
The revised opinion polished the reasoning, not the outcome. It still affirmed the jury’s verdict on every issue except a technical adjustment to prejudgment interest. The panel stood by its rejection of Travelers’ defenses and its endorsement of the jury’s finding that microscopic soot contamination caused direct physical loss and damage.
The dissenting judge expanded his earlier objections, arguing that only a few thousand dollars of covered damage were proven and that the rest was overreach. But that view remains a minority opinion. The controlling decision continues to support the long-standing principle that contamination that soils or infiltrates property is a covered cause of loss.
Where the Case Stands Now
The August opinion was vacated when the panel agreed to rehear the case. The new November 17 opinion replaces it. That’s the law of the case unless and until the full Eighth Circuit steps in.
So, for now, the November opinion stands as a reaffirmation that smoke and soot are covered causes of loss and that “direct physical loss or damage” includes physical contamination that is “permanent absent some intervention.”
The Bigger Picture
Before COVID-19 cases flooded the courts, insurers routinely paid for soot and smoke cleanup. Most of the fights had to do with how to remove the smoke and soot. Only after the pandemic litigation did insurers begin reinterpreting “physical loss” to dodge smoke and soot claims. Maxus shows that courts still recognize the difference between fleeting viral particles and tangible, lasting contamination like soot, ash, and smoke residue.
Travelers is fiercely battling something it used to pay for without a fight. But for now, the Eighth Circuit’s message remains intact: when your property is coated, infiltrated, or contaminated by soot, that is a direct physical loss and your insurer must pay.
I want to give a shout-out to attorney Kevin Pollack for bringing this new opinion to my attention.
Thought for the Day
“Truth never damages a cause that is just.”
—Mahatma Gandhi
1 Maxus Metropolitan v. Travelers Prop. Cas. Co. Of America, No. 24-1176 (8th Cir. Nov. 17, 2025).