Find Legal Information

                   Docket No. 96978–Agenda 15–May 2004.

CENTRAL ILLINOIS LIGHT COMPANY, Appellee, v. THE
           HOME INSURANCE COMPANY et al., Appellants.
 

Opinion filed December 2, 2004.
 

       JUSTICE GARMAN delivered the opinion of the court:
 

       Plaintiff Central Illinois Light Company (CILCO) filed suitagainst its excess liability insurers for indemnification of fundsexpended to investigate and remediate environmental contaminationat several sites that formerly housed manufactured gas plants (MGPs).Defendant insurers filed nine motions seeking summary judgment orpartial summary judgment. The circuit court granted five of thesemotions and denied four.
 

       Interlocutory cross-appeals were taken to the appellate courtpursuant to Rule 308 (155 Ill. 2d R. 308). CILCO appealed the circuitcourt’s orders granting three of the summary judgment motions, oneof which was the dismissal of claims based on coverage contained inpolicies written in 1948-57 and 1974-85. CILCO was unable to locatethe actual policies, but offered secondary evidence of these writings,which the circuit court found inadmissible. In addition, the circuitcourt denied CILCO’s motion for additional discovery of standard orsample policy language in use by the defendants at these times.CILCO also raised this issue on appeal. Defendants cross-appealed thecircuit court’s denial of three of their summary judgment motions.
 

       The appellate court reversed the circuit court’s order grantingsummary judgment in favor of the defendants on the issue ofindemnity. In addition, the appellate court reversed the circuit court’sjudgment on the missing policy issues. The appellate court affirmed aruling dealing with CILCO’s claim for legal expenses in litigation thatis not at issue in the present appeal. Finally, the appellate courtdeclined to review defendants’ appeals from the denial of threesummary judgment motions. 342 Ill. App. 3d 940, 965.
 

       We granted defendants’ petitions for leave to appeal pursuant toRule 315(a) (177 Ill. 2d R. 315(a)). Pursuant to Supreme Court Rule345 (155 Ill. 2d R. 345), we have permitted the Complex InsuranceClaims Litigation Association to file a brief amicus curiae on behalfof the defendants. We have also permitted the Illinois EnergyAssociation, the Illinois Environmental Regulatory Group, NorthernIllinois Gas Company, Kraft Foods North America, Inc., the BuildersAssociation of Greater Chicago, the Northern Illinois BuildingContractors Association, Illinois Tool Works, Inc., the Illinois StateFabricare Association, the Land of Lincoln Drycleaners Association,Inc., and the Chicagoland Cleaners Association to file briefs amicicuriae on behalf of the plaintiffs.

BACKGROUND
 

       Plaintiff CILCO is the owner of several properties in the State ofIllinois that formerly housed MGPs, including sites located atMacArthur Boulevard (MacArthur) and First and Washington Streets(First and Washington) in Springfield and Persimmon Street(Persimmon) in Peoria. Gas was manufactured at these facilities fromthe 1850s through the 1930s, using processes that created coal tar asa by-product. The coal tar was recovered, stored in undergroundcontainment structures, and sold. By the middle of the twentiethcentury, MGPs were being rendered obsolescent by the advent ofnatural gas pipelines. CILCO dismantled the First and Washington sitein the late 1920s and the MacArthur and Persimmon sites in the early1950s. At each site, the cover of the containment structure wasremoved and most of the remaining coal tar was extracted for sale.However, significant amounts of tar remained in the structures, whichwere filled in with construction debris and other materials. Over time,the structures leaked and the surrounding soil and groundwater werecontaminated.
 

       In 1985, CILCO received a report prepared by the RadianCorporation in conjunction with the United States EnvironmentalProtection Agency (EPA), which described the potential forenvironmental contamination at former MGP sites. CILCO began toinvestigate its properties and identified three former MGP sites that itthen owned, the MacArthur, First and Washington, and Persimmonlocations. Visual inspection of these sites revealed no evidence ofcontamination. However, in 1986, discolored and odorous soil wasdiscovered at the MacArthur site by workers excavating to install anunderground storage tank. CILCO investigated and eventuallydetermined that tar constituents were present in the soil.
 

       Shortly thereafter, the Illinois Environmental Protection Agency(IEPA) held a meeting for the heads of the environmental departmentsat various Illinois utilities to discuss potential environmentalcontamination at more than 100 MGP sites throughout the state. Therecord contains the affidavit of a former CILCO environmentalengineer in which he states that at the meeting the utilities wereinformed that they were strictly liable, under state and federal law, forenvironmental contamination at MGP sites. Further, the companieswere informed that although the IEPA could bring suit to compelinvestigation and remediation of the sites, the companies could actvoluntarily under the supervision of the agency. The IEPA officialspresenting this information also informed the utilities that they coulddeal with this liability “the easy way or the hard way.”
 

       CILCO’s subsequent expenditures to investigate and remediatethe contamination of its MGP sites were not the result of a judgmentfollowing adjudication of liability or of a settlement reached after theinitiation of an enforcement action. Rather, CILCO entered into avoluntary agreement with the IEPA in 1987, pursuant to the Pre-Notice Site Cleanup Program (Pre-Notice Program). The Pre-NoticeProgram was established pursuant to a provision of the EnvironmentalProtection Act (Act) that permitted the IEPA, upon the request of theowner or operator, to provide review and evaluation services at a sitewhere hazardous substances might be present, and to supervise thevoluntary cleanup of the site. 415 ILCS 5/22.2(m)(1) (West 1994).Under the agreement between CILCO and the IEPA, agencyguidelines and instructions governed the cleanup work. All work plansrequired agency approval. In addition, the IEPA regularly billedCILCO for its costs in overseeing the investigation and remediation.In 1995, the Pre-Notice Program was replaced with the SiteRemediation Program (415 ILCS 5/58 et seq. (West 1996)), whichalso provides for voluntary cleanup of certain types of sites underIEPA oversight. Eventually, the IEPA sent “No Further Action”letters to CILCO, informing it that it was released from “furtherresponsibilities under the Act for performance of the approvedremedial action” with regard to certain sites.
 

       This litigation followed when CILCO sought indemnificationfrom its excess insurers for its expenditures related to investigationand remediation of the sites. Defendants included the Home InsuranceCompany (Home) and certain other London market insurers (referredas the CLMI) from whom CILCO purchased excess liability policiesbetween 1948 and 1985. It is the construction of the language of theCLMI policies that is at issue in the present case.
 

       From 1957 through 1971, the CLMI policies provided that theinsurers would “indemnify [the insured] for any and all sums which theInsured shall by law become liable to pay and shall pay or by finaljudgment be adjudged to pay, or which by agreement between theInsureds and the Underwriters, or their representatives shall be paidto any person, firm *** as damages *** to property.” (Emphasesadded.)
 

       Later policies contained different language. After 1979, “lowerlayer” policies required CLMI to indemnify CILCO “for all sumswhich the Assured shall be obligated to pay by reason of the liability:(a) imposed upon the Assured by law, or (b) assumed under contractor agreement with the Named Assured for damages on account of: (i)Bodily Injury [or] (ii) Property Damage caused by or arising out ofeach occurrence happening within the United States of America.”(Emphases added.) The “higher layer” policies after 1979, in relevantpart, use the same or similar language.
 

       The policy definition of “ultimate net loss” also changed overtime. In the earlier policies, “ultimate net loss” was defined as “thesums for which the Insured is liable in settlement of an occurrence.”(Emphases added.) The later policies defined the term as “the totalsum which the Assured *** become[s] obligated to pay by reason ofbodily injuries or property damage claims, either through adjudicationor compromise, excluding all expenses and costs.” (Emphases added.)
 

       In its order granting partial summary judgment to CLMI, thecircuit court concluded that it was bound by the decision of theappellate court in Zurich Insurance Co. v. Carus Corp., 293 Ill. App.3d 906 (1997). After hazardous substances were found in the soil andgroundwater at its chemical manufacturing facility, Carus soughtadmission to the IEPA Site Remediation Program in an effort to avoidbeing placed on the EPA’s National Priorities List of sites targeted forcleanup. Carus, 293 Ill. App. 3d at 907. Following acceptance into theprogram, Carus was required to conduct an investigation and studyunder the supervision of the IEPA, which the IEPA then used todetermine what remedial action was needed to comply with federaland state environmental laws. Carus, 293 Ill. App. 3d at 908. Zurichand other liability insurers denied coverage for Carus’ consulting feesand investigation expenses and filed a declaratory judgment action inwhich the issue was whether they were required to indemnify Carusfor expenses incurred while participating in the voluntary IEPAprogram. The insurance policies at issue contained both a duty todefend against “suits against the insured seeking damages” and a dutyto indemnify the insured for all sums that the insured became “legallyobligated to pay as damages” due to bodily injury and propertydamage caused by an occurrence. Carus, 293 Ill. App. 3d at 907.
 

       Affirming the circuit court’s judgment that Zurich and the otherinsurers had no duty to indemnify Carus, the appellate court relied onthis court’s decision in Lapham-Hickey Steel Corp. v. ProtectionMutual Insurance Co., 166 Ill. 2d 520 (1995). In Lapham-Hickey, asin Carus, the applicable insurance policy used the term “suit” in itsdescription of the purchased coverage. The policy required the insurer“to defend any suit against the Insured alleging liability for suchdamage.” Lapham-Hickey, 166 Ill. 2d at 528. This court concludedthat Lapham-Hickey’s voluntary investigation of soil and groundwatercontamination did not trigger the insurer’s duty to defend because nosuit was ever brought against the company. Lapham-Hickey, 166 Ill.2d at 531-32. The Carus court similarly concluded that because nosuit was ever brought against Carus, the carriers had no duty todefend in that case either. Carus, 293 Ill. App. 3d at 909. Further,because there was no duty to defend, there was no duty to indemnify.Carus, 293 Ill. App. 3d at 909-10, citing Crum & Forster ManagersCorp. v. Resolution Trust Corp., 156 Ill. 2d 384, 398 (1993). Inaddition, no duty to indemnify was created by the “legally obligatedto pay” language because “no document Carus ever received in thismatter asserted such an obligation,” and Carus “initiated itsinvolvement in the program voluntarily by petitioning the IEPA.”Carus, 293 Ill. App. 3d at 910.
 

       Reversing the circuit court, the appellate court in the present casedistinguished Carus and Lapham-Hickey on several grounds. First, theappellate court noted that CLMI did not contract to providecomprehensive general liability (CGL) insurance that included a dutyto defend CILCO. Rather, CLMI provided only excess liabilitycoverage. 342 Ill. App. 3d at 957-58. Under no circumstances wouldCLMI have had a duty to defend, even if a lawsuit had been filedagainst CILCO. When only indemnification is contracted for, makinga duty to indemnify contingent on the existence of a duty to defend isillogical and defeats the purpose of the policy. Second, the appellatecourt observed that, unlike the policies at issue in Carus and Lapham-Hickey, the CLMI policies it was called upon to construe did notcontain the term “suit.” 342 Ill. App. 3d at 951. Third, the appellatecourt framed the “legally obligated to pay as damages” inquiry aswhether CILCO “face[d] legal liability for environmental responsecosts,” rather than as whether the obligation arose from adjudicationor settlement of a suit. 342 Ill. App. 3d at 954.

ISSUES PRESENTED
 

       We must determine whether the appellate court properlyconstrued the policy language to determine, first, that the filing of alawsuit or administrative complaint is not a condition precedent toCLMI’s duty to indemnify (342 Ill. App. 3d at 953), second, thatCILCO was legally obligated to undertake a cleanup of the sites (342Ill. App. 3d at 954), and, third, that CILCO’s expenditures in doing soconstituted “damages” (342 Ill. App. 3d at 960-61).
 

       CLMI argues that (1) the policy language and the case lawconstruing similar language clearly require a lawsuit or otheradversarial proceeding, such as an administrative complaint, before itsduty to indemnify arises; (2) in the absence of a lawsuit, CILCO wasnot “legally obligated” to undertake a cleanup of the MGP sites; (3)CILCO’s expenditures to investigate and remediate the MGP sites didnot constitute the payment of “damages”; and (4) public policysupports interpretation of insurance contracts as written, withoutexpanding the insurer’s duty to indemnify to encompass voluntaryexpenditures by the insured for business or public relations purposes.

CILCO’S MOTION TO STRIKE
 

       This court granted defendants’ petition for leave to appeal todetermine whether the appellate court properly held that thedefendants are obligated, under the language of the relevant insurancepolicies, to indemnify CILCO for the costs of investigation andremediation of the MGP sites.
 

       In their brief to this court, however, defendants raise anadditional issue–whether the appellate court was correct when itreversed the circuit court’s rulings regarding certain “missingpolicies.” The issue raised with regard to the missing documentationhas two parts. First, CILCO offered secondary evidence todemonstrate what the missing documents were likely to havecontained. Second, CILCO sought additional discovery of sample orspecimen policy language that defendants were using at the relevanttimes. The circuit court rejected the secondary evidence and deniedthe request for additional discovery. 342 Ill. App. 3d at 947-48. Theappellate court reversed both rulings. 342 Ill. App. 3d at 961-62.
 

       CILCO’s motion to strike the portion of defendants’ briefaddressing the evidentiary and discovery issues was taken with thecase. We now grant the motion to strike.
 

       Supreme Court Rule 315(b)(3) requires that a petition for leaveto appeal contain “a statement of the points relied upon for reversal ofthe judgment of the Appellate Court.” 177 Ill. 2d R. 315(b)(3). Aparty’s failure to raise an issue in the petition for leave to appeal maybe deemed waiver of that argument. Federal Deposit Insurance Corp.v. O’Malley, 163 Ill. 2d 130, 154 (1994).
 

       Waiver is a limitation on the parties and not on the jurisdiction ofthis court. Thus, even when a party has failed to raise an issue in itspetition for leave to appeal, we may choose to address it in the interestof preserving a sound and uniform body of precedent. People v.Hamilton, 179 Ill. 2d 319, 323 (1997). In the present case, however,we see no justification for making such an exception to the generalrule of waiver. The evidentiary and discovery issues do not affect ouranalysis of the issue raised in the petition for leave to appeal. Inaddition, permitting CILCO to offer relevant and probative secondaryevidence does nothing more than enable it to argue to the trier of factthat certain policy language was in effect at certain times. Permittingadditional discovery will ensure, to the extent possible, that the actualpolicy language in effect at relevant times will be in evidence.

ANALYSIS
 

       The circuit court’s entry of summary judgment is subject to denovo review. Outboard Marine Corp. v. Liberty Mutual InsuranceCo., 154 Ill. 2d 90, 102 (1992). The construction of an insurancepolicy, which is a question of law, is also reviewed de novo. AmericanStates Insurance Co. v. Koloms, 177 Ill. 2d 473, 479-80 (1997).
 

       When construing the language of an insurance policy, a court’sprimary objective is to ascertain and give effect to the intentions of theparties as expressed by the words of the policy. Crum & Forster, 156Ill. 2d at 391. An insurance policy, like any contract, is to beconstrued as a whole, giving effect to every provision, if possible,because it must be assumed that every provision was intended to servea purpose. Martindell v. Lake Shore National Bank, 15 Ill. 2d 272,283, 154 N.E.2d 683 (1958). If the words used in the policy are clearand unambiguous, they must be given their plain, ordinary, andpopular meaning. Outboard Marine, 154 Ill. 2d at 108. However, ifthe words used in the policy are reasonably susceptible to more thanone meaning, they are ambiguous and will be strictly construed againstthe drafter. Outboard Marine, 154 Ill. 2d at 108-09. Further, as theappellate court has so often stated, an ambiguity will be found if thelanguage of the contract is “obscure in meaning through indefinitenessof expression.” Platt v. Gateway International Motorsports Corp.,351 Ill. App. 3d 326, 330 (2004); see also Meyer v. Marilyn Miglin,Inc., 273 Ill. App. 3d 882, 888 (1995). A contract is not renderedambiguous merely because the parties disagree on its meaning.Johnstowne Centre Partnership v. Chin, 99 Ill. 2d 284, 288 (1983).On the other hand, a contract is not necessarily unambiguous when,as here, each party insists that the language unambiguously supportsits position. Rather, whether a contract is ambiguous is a question oflaw. Quake Construction, Inc. v. American Airlines, Inc., 141 Ill. 2d281, 288 (1990).

1. Requirement of a Lawsuit
 

       Under the 1957-71 policy language, indemnification is providedunder any one of three circumstances: (1) the insured’s becomingliable to pay and, in fact, paying damages, or (2) a final judgmentawarding damages, or (3) an agreement between the insured and theunderwriters to pay damages. In the present case, because there hasbeen no final judgment, and because CLMI was not a party to anyagreement, only the first of these three options is potentiallyapplicable.
 

       CLMI argues that in the first option, the language “liable to pay*** as damages” necessarily connotes the need for suit and, further,“suggests that a court judgment is necessary.” This simply cannot bethe case. If a court judgment is necessary to trigger a duty toindemnify under the “becoming liable to pay” term, then the “finaljudgment” term is mere surplusage. See Dowd & Dowd, Ltd. v.Gleason, 181 Ill. 2d 460, 479 (1998) (courts will generally avoidinterpretations that render contract terms surplusage); OutboardMarine, 154 Ill. 2d at 123 (courts must strive to give each term in thepolicy meaning unless to do so would render the clause or policyinconsistent or inherently contradictory). Thus, a court judgmentimposing damages is sufficient to trigger the duty to indemnify, but,under the plain language of the policy, is not necessary.
 

       Under the later policies, indemnification is provided if the insuredis obligated to pay damages by reason of a liability either (1) imposedby law or (2) assumed under contract or agreement. Unlike the earlierpolicies, the underwriters’ participation in such an agreement is notrequired.
 

       Thus, if the amounts paid by CILCO to investigate and clean upthe contamination constitute “damages,” CILCO is entitled toindemnification if the liability for such damages is either imposed bylaw (under both the earlier and later policies) or assumed byagreement (under the later policies). The policies do not define theterms “damages,” “obligated,” “liable to pay,” or “imposed by law.”Moreover, the plain, ordinary, and popular meanings of the terms, asreflected in dictionary definitions, do not resolve the issue.
 

       “Liable” merely means “legally obligated” (Webster’s NewCollege Dictionary 631 (1999)) or “obligated according to law orequity” (Merriam-Webster’s Collegiate Dictionary 668 (2000)).Black’s Law Dictionary defines “liability” as the “quality or state ofbeing legally obligated or accountable; legal responsibility to anotheror to society, enforceable by civil remedy or criminal punishment.”Black’s Law Dictionary 932 (8th ed. 2004). Neither of thesedefinitions reveals how such a legal obligation attaches.
 

       An “obligation” is a “legal or moral duty to do *** something”or a “formal, binding agreement or acknowledgment of a liability topay a certain amount or to do a certain thing ***; esp. a duty arisingby contract.” Black’s Law Dictionary 1104 (8th ed. 2004). Althoughit is beyond debate that a binding agreement can give rise to a legalobligation, such obligations can arise in other ways. A “statutoryobligation,” for example, is an “obligation–whether to pay money,perform certain acts, or discharge duties–that is created by or arisesout of a statute, rather than based on an independent contractual orlegal relationship.” Black’s Law Dictionary 1105 (8th ed. 2004).Neither of these definitions mention the need for an adjudication orthe filing of a lawsuit as a precondition of the obligation.
 

       Similarly, the dictionary definition of “damages” as “[m]oney tobe paid as compensation for injury or loss” does not reveal under whatcircumstances such compensation becomes due. Webster’s NewCollege Dictionary 285 (1999); see also Merriam-Webster’sCollegiate Dictionary 290 (2000) (“compensation in money imposedby law for loss or injury”). The definition contained in the legaldictionary, “[m]oney claimed by, or ordered to be paid to, a person ascompensation for loss or injury” (Black’s Law Dictionary 416 (8th ed.2004)), suggests that funds expended are not damages unless paid inresponse to a claim or in compliance with an order. The filing of alawsuit is, no doubt, sufficient to assert a claim for damages. Thepolicies clearly contemplate that the insured might admit liability andagree to pay damages as part of a settlement or compromise oflawsuit. What is less clear is whether under the policy terms the filingof a lawsuit or, when an agency like the IEPA is involved, theinitiation of administrative proceedings is necessary before fundsexpended to remedy property damage can be called damages.
 

       We conclude that the policy language, standing alone, does notrequire the insured to have been served as the defendant or respondentin an adversarial proceeding before the duty to indemnify arises. If thiswere a dispute involving the construction of an insurance contractbetween a consumer and his insurer, we might stop at this point in theanalysis and conclude that the language of the policy should beconstrued against the drafter because it is “obscure in meaningthrough indefiniteness of expression.” Platt, 351 Ill. App. 3d at 330.However, both parties to these policies are sophisticated businessentities that can be assumed to have specialized knowledge of thecontractual terms they employ. Indeed, both parties cite to thesubstantial body of case law from Illinois and other jurisdictionsinterpreting similar policy language in similar factual situations. Wenow turn to those authorities to aid in our construction of the policiesto determine whether the filing of a lawsuit or other adversarial actionis a precondition to indemnification.
 

       CLMI points to a decision of the Supreme Court of California, inwhich similar policy language was construed to requireindemnification only of sums that the insured became legally obligatedto pay as damages by order of a court. In Certain Underwriters atLloyd’s of London v. Superior Court, 24 Cal. 4th 945, 16 P.3d 94,103 Cal. Rptr. 2d 672 (2001) (hereinafter Powerine), the insured, anoil refiner, sought a declaration that its insurers were obligated toindemnify it for costs incurred in administrative proceedingsconcerning environmental claims. The issue on review was whetherthe insurer’s duty to indemnify for “all sums that the insured becomeslegally obligated to pay as damages” was limited to money ordered bya court. Powerine, 24 Cal. 4th at 955, 16 P.3d at 100, 103 Cal. Rptr.2d at 678.
 

       Although the policy language was quite similar to the policylanguage at issue in the present case, the policies themselves are vastlydifferent. The policies purchased by Powerine were standard CGLpolicies that imposed on the insurer not only a duty to indemnify theinsured for covered losses, but also a duty to defend the insured “inany suit seeking damages” for covered losses. Powerine, 24 Cal. 4that 957, 16 P.3d at 101, 103 Cal. Rptr. 2d at 680. These two“correlative” duties “lie at the core of the standard [CGL] policy.”Powerine, 24 Cal. 4th at 958, 16 P.3d at 101, 103 Cal. Rptr. 2d at680. The California court concluded that, under such a policy,“[w]here there is a duty to defend, there may be a duty to indemnify;but where there is no duty to defend, there cannot be a duty toindemnify.” (Emphases in original.) Powerine, 24 Cal. 4th at 958, 16P.3d at 102, 103 Cal. Rptr. 2d at 681.
 

       We might agree with this conclusion if the policies at issue in thepresent case were standard CGL policies imposing both duties.However, CILCO purchased and CLMI sold excess liability coverageonly. CLMI’s duty to indemnify cannot be predicated on the duty todefend because under no circumstances will these policies impose aduty to defend.
 

       We do agree, however, with the California court’s remark thatthese two duties “differ in their triggering. Whereas the duty toindemnify can arise only after damages are fixed in their amount[citations], the duty to defend may arise as soon as damages aresought in some amount [citations].” Powerine, 24 Cal. 4th at 958, 16P.3d at 102, 103 Cal. Rptr. 2d at 680. The question for us is whetherdamages may be fixed in their amount, and the insured legallyobligated to pay them, in the absence of a lawsuit or other adversarialproceeding.
 

       CLMI argues further that even if the amounts paid by CILCO canbe said to constitute “damages,” legal liability for damages “must beforged in the crucible of an adversary proceeding where third partyclaims and defenses thereto are tested.” CLMI argues that this court’sdecision in Citizens Utility Board v. Illinois Commerce Comm’n, 166Ill. 2d 111 (1995), supports its reading of the policy term “damages”as requiring a lawsuit. In that case, however, we did not have occasionto use the term “damages.” The issue in Citizens Utility Board waswhether the Commission had properly ruled that Illinois utilities,including CILCO, could recover the costs of coal tar cleanup at MGPsites through their utility rates. Citizens Utility Board, 166 Ill. 2d at121. In concluding that these costs could be passed on to ratepayers,we referred to the cleanup costs as “legally mandated costs ofbusiness” (Citizens Utility Board, 166 Ill. 2d at 122), and as “costs ofdoing business” (Citizens Utility Board, 166 Ill. 2d at 124). Weanalogized these costs to taxes, which are “a necessary expense ofutility operations” (Citizens Utility Board, 166 Ill. 2d at 123), and“statutorily imposed operating expenses” (Citizens Utility Board, 166Ill. 2d at 125).
 

       CLMI also calls our attention to our statement that “[c]oal-tarcleanup costs may be likened to operating and maintenance costsincurred to repair land erosion or rotting building materials which arerecoverable from ratepayers.” Citizens Utility Board, 166 Ill. 2d at128. This statement, however, is taken out of context. We did notstate that statutorily mandated environmental cleanup is no differentfrom routine maintenance of one’s property. Indeed, we noted that insome cases, state and federal environmental laws require utilities toclean up properties they no longer own. Citizens Utility Board, 166Ill. 2d at 129.
 

       Citizens Utility Board was decided in an entirely differentcontext–that of utility ratemaking under the Public Utilities Act (220ILCS 5/1–101 et seq. (West 2002)). Our decision in Citizens UtilityBoard does not establish that the same expenses that are recoverablevia utility rates cannot also be categorized as “damages” as that termis used in an insurance policy. Thus, nothing in Citizens Utility Boardis relevant to the question at hand–whether the “damages” that mustbe indemnified under the terms of the insurance policies must be fixedby the resolution of a lawsuit, either by settlement or judgment.
 

       CLMI also relies upon Outboard Marine to argue that theappellate court erred by analyzing the policy term “damages”separately from the terms “liable to pay,” “liability imposed *** bylaw,” and “obligated to pay.” Specifically, CLMI argues that theappellate court’s definition of damages as “ ‘ “money one must expendto remedy an injury for which he or she is responsible” ’ ” (342 Ill.App. 3d at 960, quoting Vogue Tyre & Rubber Co. v. CIGNAProperty & Casualty Insurance Co., No. 96 C 4864, slip op. at ___(N.D. Ill. November 13, 1998), quoting Outboard Marine, 154 Ill. 2dat 116) was taken out of context. The “complete quote,” according toCLMI is: “ ‘damages’ connotes money one must expend to remedy aninjury for which he or she is responsible, irrespective of whether thatexpenditure is compelled by a court of law in the form ofcompensatory damages or by a court of equity in the form ofcompliance with mandatory injunctions.” Outboard Marine, 154 Ill.2d at 116. Thus, CLMI asserts some sort of suit, either in law or inequity, is necessary.
 

       In Outboard Marine, the EPA and the IEPA had already broughtseparate actions against Outboard Marine before the insurance disputearose. Outboard Marine, 154 Ill. 2d at 98. The relief sought in theunderlying litigation was equitable, rather than legal, in nature.Outboard Marine, 154 Ill. 2d at 100. At issue was whether theinsurers’ duty to defend under CGL policies was triggered by a suitfor equitable relief when the policy language clearly required theexistence of a suit seeking damages. The passage quoted above iscontained in the portion of our Outboard Marine opinion in which wediscuss the usual and ordinary meaning of the term “damages,” and inwhich we look to the dictionary definition for guidance. OutboardMarine, 154 Ill. 2d at 115-16. Our inquiry in Outboard Marine wasnot how broad the usual and ordinary meaning of the policy term“damages” might be but, rather, whether it was so narrow that itexcluded the expense of complying with a mandatory injunction.Outboard Marine, 154 Ill. 2d at 115-16. What we learn fromOutboard Marine is that, in the absence of policy language to thecontrary, the language “suit seeking damages” will be construed toinclude suits seeking either or both compensatory damages andequitable relief. This lesson does not resolve the present dispute.
 

       Because the policy at issue in Outboard Marine was a CGLpolicy, the “suit seeking damages” language was clearly intended toprovide the trigger for the duty to defend. In the present case, no suchtrigger is needed because the parties did not contract for a duty todefend. The purpose and, therefore, the language of the CLMIpolicies are different from the CGL liability policies being construedin Outboard Marine. The fact that the term “damages” in theOutboard Marine case was construed to include both legal andequitable remedies imposed by a final judgment does not necessarilymean that the same term, contained in a policy that does not expresslyrequire a “suit,” does not refer to “the money required to be expendedin order to right a wrong” (Outboard Marine, 154 Ill. 2d at 116) inthe absence of a lawsuit.
 

       We return, below, to a discussion of the meaning of the phrase“as damages” because further exploration of that term is necessary todetermine whether funds expended pursuant to a legal obligation toremedy environmental pollution are damages, as opposed to someother form of payment. We can conclude without further analysis,however, that the language of the policies does not expressly requirethe insured’s liability for damages to be fixed by the resolution of alawsuit, either by settlement or judgment. For example, the definitionof “ultimate net loss” as “the sums for which the Insured is liable insettlement of an occurrence,” says nothing about the necessity for asuit to be filed before such a settlement can take place. The laterdefinition of the same term, referring to the insured’s obligation to payproperty damage claims “either through adjudication or compromise,”appears to permit the compromise of a claim without the necessity ofan action having been filed against the insured. We note that in theliability insurance industry, when an insured admits liability for aninjury, funds are routinely paid to injured parties in settlement ofclaims without the necessity for a lawsuit. The funds paid to resolvesuch claims are generally understood to be “damages” in the usual andordinary sense of the word.
 

       Having concluded that the policy language does not require thefiling of a lawsuit or administrative complaint as a precondition toCLMI’s duty to indemnify, we now turn to the questions of whetherCILCO was legally obligated to undertake cleanups of its MGP sitesand, if so, whether the expenditures are properly characterized asdamages.

2. A Legal Obligation to Pay
 

       CLMI characterizes CILCO’s expenditures as purely voluntaryand as motivated by its desire to be a good corporate steward of itsland or to make a prudent investment in rehabilitating its property.Because CILCO’s actions were purely voluntary, CLMI argues,CILCO was not acting under a legal obligation.
 

       CILCO’s legal obligation to make the cleanup expenditures, ifany, did not attach as a result of a final judgment in a lawsuit or evenof a ruling by a state administrative agency. Rather, CILCO wasinformed by the IEPA of the strict liability for coal tar contaminationthat attaches to those who formerly operated MGP sites. See 42U.S.C. §9601 et seq. (2000) (Comprehensive EnvironmentalResponse, Compensation, and Liability Act of 1980 (CERCLA)); 415ILCS 5/22.2(f) (West 2002) (imposing liability upon the owner oroperator of a facility for the release or substantial threat of release ofa hazardous substance, subject only to the defenses enumerated insubsection (j)); 415 ILCS 5/22.2(j) (West 2002) (an otherwise liableperson shall not be liable for a “release or substantial threat of releaseof a hazardous substance” if the resulting damages were “causedsolely” (emphasis added) by one of the enumerated acts or events).CILCO, already aware of soil contamination at the MacArthur siteand aware that it owned at least two other sites with buried coal tarcontainment structures that posed a threat of release of coal tar intothe soil and groundwater, elected to participate in a voluntary cleanupprogram. The alternative, as described by the IEPA official, was to doit the “hard way” by ignoring the problem until the IEPA initiated anenforcement proceeding.
 

       CLMI offers two decisions of this court and several decisions ofthe appellate court as support for its argument that CILCO was notacting under a legal obligation. We have already rejected reliance onOutboard Marine and Lapham-Hickey as a basis for construing theterms of the CLMI policies. These cases stand for the proposition thata pending legal proceeding is necessary to trigger an insurer’s duty todefend when a CGL policy expressly refers to the defense of suitsseeking damages. Lapham-Hickey, 166 Ill. 2d at 532; OutboardMarine, 154 Ill. 2d at 116-17. The CLMI policies contemplate that aninsured may become legally obligated to pay damages in the absenceof a lawsuit. Thus, these cases do not assist us in determining underwhat circumstances such a legal obligation may arise.
 

       In Northern Illinois Gas Co. v. Home Insurance Co., 334 Ill.App. 3d 38 (2002), the appellate court affirmed the circuit court’sruling that the insurers owed no duty to indemnify the utility forexpenses voluntarily incurred to investigate and clean up MGP sites.The operative policy language was almost identical to the CLMIpolicies at issue in the present case. Northern Illinois Gas Co., 334 Ill.App. 3d at 43. The Northern Illinois Gas Company (Nicor)participated in the IEPA voluntary site remediation program andthereafter sought indemnification from Home, claiming that it waslegally obligated to pay the costs of investigation and cleanup “byreason of liability imposed by law or alternatively based upon itsagreements with IEPA.” Northern Illinois Gas Co., 334 Ill. App. 3dat 43. The appellate court rejected this argument, finding Carus to becontrolling because Carus relied not only on the “suit” language in thepolicy but on the “obligated to pay” language as well. NorthernIllinois Gas Co., 334 Ill. App. 3d at 46.
 

       The Carus court did indeed mention the “obligated to pay”language, but only in a single paragraph noting that Carus admittedthat it “initiated its involvement in the program voluntarily bypetitioning the IEPA.” Carus, 293 Ill. App. 3d at 910. CILCO alsoparticipated in the voluntary program, but only after being informedby the IEPA that its compliance would be forthcoming, one way orthe other. Further, Carus did not seek a declaration that Home wasliable for the costs of the cleanup of the contaminated property.Carus, 293 Ill. App. 3d at 910. Carus was seeking indemnification ofonly the costs of “hiring consultants and voluntarily conducting itsown investigation.” Carus, 293 Ill. App. 3d at 910. Thus, the Caruscourt never considered whether Carus had been subject to a claim fordamages or was legally obligated to pay the cleanup costs.
 

       We find the two other appellate court cases offered by CLMI,which were also cited with approval in Northern Illinois Gas Co., tobe inapposite. In Douglas v. Allied American Insurance, 312 Ill. App.3d 535 (2000), the insurer initially provided representation pursuantto its duty to defend but then tendered the policy limits to the courtand withdrew, without reaching a settlement or obtaining the insured’sconsent. The insurer relied upon the policy term stating that it had noobligation to the insured after the policy limits were “exhausted bypayment.” Douglas, 312 Ill. App. 3d at 539. The appellate courtdetermined that, when read together with the preceding language,which included the term “legally obligated to pay,” the entireprovision was revealed to be ambiguous. Douglas, 312 Ill. App. 3d at540. The appellate court observed:
 

“The term ‘legally obligated’ is not defined in the policy, butits plain meaning suggests an obligation due to judgment orsettlement. In support of our interpretation, we note thatBlack’s Law Dictionary states that a legal obligation formsthe basis for a judgment in a court of competent jurisdiction.”Douglas, 312 Ill. App. 3d at 540.
 

The court cited to the fifth edition (1979) of Black’s Law Dictionary,which is not readily available. In the sixth edition (1990), however, theterm “legal obligation” is defined as “an obligation which would form[the] basis of judgment against [the] state in [a] court of competentjurisdiction should [the] Legislature permit [the] state to be sued.”Black’s Law Dictionary 896 (6th ed. 1990). Thus, given the selectivenature of the quotation, we find this passage from Douglas to be lessthan persuasive. In any event, if a legal obligation “forms the basis”for a judgment, it must be capable of existing independently of thejudgment itself. We note that the most recent edition of the dictionarydoes not contain an entry for “legal obligation,” perhaps because theterm is so vague and potentially encompasses so much. Finally, ifDouglas offers any guidance at all in the present case, it suggests thatwe should find the CLMI policies ambiguous.
 

       In Guillen v. Potomac Insurance Co. of Illinois, 323 Ill. App. 3d121, 131 (2001), one issue was whether the insurer was “legallyobligated to pay” an amount settled upon by the insureds and theplaintiff after the insurer failed to defend a lawsuit. Guillen does not,however, assist us in answering the issue presented in the instantcase–under what circumstances a legal obligation to pay can arise inthe absence of an adversarial proceeding.
 

       The appellate court in the present case offered four reasons forits conclusion that CILCO was legally obligated to remediate thecontamination at its MGP sites. 342 Ill. App. 3d at 954-55. First,CERCLA and the Act mandate such a cleanup. Indeed, the Actimposes strict liability for this type of contamination. 415 ILCS5/22.2(f) (West 2002). Second, Outboard Marine and Lapham-Hickey do not stand for the rule urged by the insurers. Third, Carusand Northern Illinois Gas Co. are not persuasive on this issue. And,finally, construing the term “legally obligated” in the manner CILCOurges is supported by authority from the United States District Courtfrom the Northern District of Illinois, as well as the courts of severalother states.
 

       We have already distinguished Outboard Marine, Lapham-Hickey, Carus and Northern Illinois Gas Co. As to the first reason,CLMI responds that even strict liability is not absolute and thatenvironmental statutes are not self-executing. The absence of a lawsuitin the present case means that there was no opportunity to raise anydefenses or limitations to liability. CILCO, however, admitted liability.Indeed, because the only defense that an owner or operator of acontaminated MGP site might conceivably raise is that thecontamination was the sole responsibility of another party (415 ILCS5/22.2(j)(1)(C) (West 2002)), it would have been futile for CILCO tocontest liability. Further, CLMI had no duty to defend CILCO andcould not have raised defenses on CILCO’s behalf in any event.
 

       With regard to the appellate court’s final rationale, CLMI arguesthat the appellate court’s reliance on Vogue Tyre & Rubber Co. v.CIGNA, No. 96 C 4864 (N.D. Ill. November 13, 1998), reconsiderationgranted and summary judgment denied, No. 96 C 4864 (N.D. Ill.February 11, 1999), is misplaced because Vogue Tyre is contrary toIllinois law and is factually distinguishable from the present case. Itfollows that CLMI also argues that the out-of-state cases that areconsistent with Vogue Tyre should be rejected.
 

       In Vogue Tyre, the insured sought indemnification for expensesit incurred remediating environmental contamination caused by leakingunderground storage tanks. The insurer moved for summary judgmenton the basis that it had no duty to defend or to indemnify because nosuit had been filed. The district court determined that the properinquiry, given the language of the policy, was not whether there wasa lawsuit but, rather, whether the insured faced legal liability. Thepolicies at issue stated that CIGNA would indemnify Vogue Tyre forall sums it became “legally obligated to pay as damages because ofbodily injury or property damage.” The district court initially grantedsummary judgment to the insurer because Vogue Tyre had cleaned upthe site “on its own accord.” Although the district courtacknowledged that Vogue Tyre would have been legally obligatedunder the Act (415 ILCS 5/22.2(f) (West 2002)) to pay cleanup costsif a government agency had cleaned up the site, it was not legallyobligated to clean up the site merely because it received a letter fromthe IEPA that “only recommended measures to address” soilcontamination. Thus, the district court concluded that because VogueTyre was not legally obligated to perform the cleanup operations,CIGNA did not have to reimburse Vogue Tyre under the terms of thepolicy.
 

       The district court subsequently granted reconsideration toaddress Vogue Tyre’s argument that state and federal environmentalstatutes clearly required it to remediate the site. Vogue Tyre arguedthat no third party need be involved if environmental regulationsmandate the cleanup. The district court found that under Illinois law,mandatory environmental regulations do impose a legal obligationwithout a requirement of third-party action. Thus, Vogue Tyre waslegally obligated to remediate the site, not only in the absence of alawsuit, but in the absence of any action by the IEPA or other partytriggering a claim for damages.
 

       The appellate court was persuaded by the reasoning of VogueTyre. 342 Ill. App. 3d at 959. Finding that CILCO was legallyobligated under state and federal law to comply with mandatoryenvironmental regulations that impose strict liability for this type ofenvironmental harm, the appellate court concluded that it is irrelevantthat CILCO participated in a voluntary program rather than wait foran enforcement action to be filed. 342 Ill. App. 3d at 959.
 

       CLMI argues that Vogue Tyre is contrary to Illinois law and isfactually distinguishable from the present case. The factual distinctionurged is that the insurer in Vogue Tyre did not contest thatenvironmental regulations required the insured to remediate the siteand CLMI “most assuredly” contests whether CILCO was required toremediate its sites. We do not find this to be a meaningful factualdistinction. The Act is clear that CILCO is strictly liable for thecontamination at its MGP sites. Thus, the Act most assuredly requiresCILCO to remediate. CLMI can, however, dispute whether CILCO’sfulfillment of its legal obligation under the Act resulted in the paymentof damages. Before turning to the question of how the “damages”policy term impacts the “obligated to pay” provision, we examine thecases from other jurisdictions that the appellate court relied upon andthat CLMI attempts to distinguish.
 

       In Bausch & Lomb Inc. v. Utica Mutual Insurance Co., 330 Md.758, 625 A.2d 1021 (1993), the insured plaintiff (B&L) undertook anenvironmental cleanup at an industrial site, without any legalproceedings having been formally filed against it by a third party andwithout a written administrative directive from the state enforcementagency. Bausch & Lomb, 330 Md. at 764, 625 A.2d at 1024. TheCGL policy sold to B&L by the defendant insurer contained aprovision requiring indemnification of sums that the insured became“legally obligated to pay as damages because of ... property damage.”The policy did not define the term “damages.” Nor did it define theword “suit,” which appeared in the policy provision regarding theinsurer’s duty to defend. Bausch & Lomb, 330 Md. at 765, 625 A.2dat 1024. Although the state did not file an administrative proceedingagainst B&L, it did list the contaminated facility on a published masterlist of potentially hazardous sites and conduct a preliminaryinvestigation. Bausch & Lomb, 330 Md. at 768-69, 625 A.2d at 1026.A state environmental official testified that “the property owner didnot enjoy the option of doing nothing” at this stage. “[A]ny testingand clean-up necessary to comply with environmental laws andregulations would be done either by the owner, acting voluntarily orunder an injunction, or by the appropriate government agency at theowner’s expense.” Bausch & Lomb, 330 Md. at 770, 625 A.2d at1027. The opinion does not reveal how or whether this threat ofenforcement by litigation was communicated to B&L. B&L fullycomplied with the state agency to clean up the facility. Bausch &Lomb, 330 Md. at 769, 625 A.2d at 1026-27.
 

       The court concluded that the cleanup costs were damages thatB&L had been legally obligated to pay. The relevant environmentalstatutes imposed strict liability upon the owners of polluted properties.Bausch & Lomb, 330 Md. at 779-80, 625 A.2d at 1031-32. The statehad the authority to enforce the laws by administrative order,injunction, or direct remediation at the owner’s expense. Thus, the“tacit threat of formal State intervention was always present in B&L’sdealings with the State regulators.” Bausch & Lomb, 330 Md. at 780,625 A.2d at 1032. Ultimately, no matter what course was taken, B&L“faced the task of complying with the environmental laws, and payingthe costs of compliance.” Bausch & Lomb, 330 Md. at 780, 625 A.2dat 1032. The court concluded that the trial court had properly foundthat B&L’s “response costs, undertaken in the regulatory context,represented a sum the corporation was legally obligated to pay.”Bausch & Lomb, 330 Md. at 780, 625 A.2d at 1032.
 

       On the question of whether these amounts were paid “asdamages,” the Maryland court relied on dictionary definitions, whichdid not entirely resolve the question, but did comport with the trialcourt’s observation that the term means “anything that a third partycan make you pay for because of damage to that third party’sproperty.” Bausch & Lomb, 330 Md. at 781, 625 A.2d at 1032.Rejecting an overly technical definition of the term that would have“cut nice distinctions” (as between legal and equitable remedies, forexample), the court noted that the “ordinary person understands‘damages’ as meaning money paid to make good an insured loss.”This definition would include environmental response costs. Bausch& Lomb, 330 Md. at 782, 625 A.2d at 1033. The court also noted thatsuch a broad definition of “damages” would still distinguish betweenother compelled expenditures such as fines, penalties, or assessments,which would not be included. Bausch & Lomb, 330 Md. at 782, 625A.2d at 1033.
 

       CLMI would distinguish Bausch & Lomb from the present caseon the basis that B&L operated under the tacit threat of stateintervention, while CILCO undertook its cleanup efforts entirelyvoluntarily. See also Northern Illinois Gas Co., 334 Ill. App. 3d at 49-50 (finding no tacit threat of agency action and, further, that such athreat does not amount to liability imposed by law).
 

       The factual record, which CLMI has accepted as true forpurposes of its motion for summary judgment (see Harrison v. HardinCounty Community Unit School District No. 1, 197 Ill. 2d 466, 476(2001) (Harrison, C.J., specially concurring, joined by Kilbride, J.)(facts contained in an affidavit in support of a motion for summaryjudgment that are not contradicted by counteraffidavit are admittedand must be taken as true for purposes of the motion)), reveals thatthe IEPA informed CILCO and other utilities at a meeting in 1987 thatthey could clean up their MGP sites “the easy way or the hard way.”This is a tacit threat of state intervention. More importantly, thisassertion of a legal obligation by a state agency, addressed to theowners of MGP sites, is similar in nature to the demand forcompensation that typically precedes litigation. We find Bausch &Lomb highly persuasive and not readily distinguishable on the facts.
 

       In Weyerhaeuser Co. v. Aetna Casualty & Surety Co., 123 Wash.2d 891, 874 P.2d 142 (1994), the insured filed a declaratory judgmentaction against its CGL insurers seeking a declaration of coverage forthe cleanup expenses at dozens of polluted sites. Weyerhaeuser, 123Wash. 2d at 893, 874 P.2d at 144. The policies, which had beenwritten over a 34-year period, provided coverage for all sums that theinsured was obligated to pay, by reason of the liability imposed by lawfor damages to property. Weyerhaeuser, 123 Wash. 2d at 896-97, 874P.2d at 145. The issue was whether the policies provided coverage foractions taken by Weyerhaeuser to clean up polluted sites pursuant tostatute, when the state environmental agency had made no overt threatof formal legal action. Weyerhaeuser, 123 Wash. 2d at 896, 874 P.2dat 145. The relevant statute imposed strict liability on current ownersof contaminated facilities. Weyerhaeuser, 123 Wash. 2d at 897-98,874 P.2d at 146. Rejecting the insurers’ argument that there must bean adversarial proceeding, or at least the threat of such a proceeding,before coverage exists, the Washington court concluded that nothingin the language of the insurance policy requires a “claim” or an overtthreat of action before the insured becomes legally obligated tocomply with the mandatory provisions of the environmental statute.Weyerhaeuser, 123 Wash. 2d at 913, 874 P.2d at 154. Characterizingthis argument as an attempt to add to the language of the policies, thecourt noted that if the insurers intended to provide coverage only ifthere were a lawsuit, or the threat of a lawsuit, they could havewritten policy language to reach that result. Weyerhaeuser, 123 Wash.2d at 913, 874 P.2d at 154.
 

       We agree with CLMI that the court in Weyerhaeuser defineddamages more broadly than is justified by the language of the policies.The term “damages” connotes the existence of another party who isasserting a claim. We concluded, above, that under the language of theCLMI policies, the claim need not take the form of a lawsuit oradministrative proceeding. However, at the very least, an insured whoseeks indemnification on the basis that it acted under a legal obligationimposed by a strict liability statute must have acted in response to anassertion by a potential plaintiff (in this case, the IEPA) that it mustact or face the consequences. A purely unilateral effort by an insuredto clean up contaminated property may fulfill a statutorily mandatedlegal obligation, but the expenditures made do not constitute damages.
 

       Finally, in Metex Corp. v. Federal Insurance Co., 290 N.J.Super. 95, 675 A.2d 220 (1996), a New Jersey court held that theinsured was legally obligated to pay for the cleanup of a spill on thebasis of a state statute that imposed strict liability, without regard towhether a lawsuit had been filed or an agency directive had beenissued. The court distinguished between “claims-made” policies inwhich coverage is triggered by a claim made by a third party and“occurrence” policies in which coverage is premised on the happeningof an occurrence. Metex, 290 N.J. Super. at 103-04, 675 A.2d at 224.Occurrence policies have no third-party claim requirement. Metex,290 N.J. Super. at 104, 675 A.2d at 224. In the end, the New Jerseycourt concluded that it is the “statutory mandate that makes a polluterlegally obligated to pay damages because of property damage. Thisliability arises upon the discharge of a hazardous substance onto theproperty.” Metex, 290 N.J. Super. at 104, 675 A.2d at 225.
 

       The Metex court’s observation about the difference betweenoccurrence-based policies and claims-based policies and the need forthe “trigger” of a third-party claim is not entirely accurate. Under bothtypes of policies, it is the making of a claim that triggers the insurer’sduty to indemnify. An occurrence policy is an “agreement toindemnify for any loss from an event that occurs within the policyperiod, regardless of when the claim is made.” Black’s Law Dictionary822 (8th ed. 2004). In contrast, a claims-made policy is an “agreementto indemnify against all claims made during a specified period,regardless of when the incidents that gave rise to the claims occurred.”Black’s Law Dictionary 821 (8th ed. 2004).
 

       The language in the CLMI policies clearly contemplatesoccurrence-based claims. For example, in the 1957-71 policies, CLMIagreed to indemnify CILCO for sums that CILCO became liable topay as damages “by reason of an occurrence” resulting from theinsured’s ownership or use of property. The later policies referred toliability imposed by law for damages for property damage “caused byor arising out of each occurrence.” The definition of “ultimate netloss” in the earlier policies referred to sums for which the insured “isliable in settlement of an occurrence.”
 

       We agree with the reasoning of Vogue Tyre and the appellatecourt that mandatory environmental regulations that impose strictliability on any owner or operator who cannot prove that anotherentity is “solely” responsible for the contamination (415 ILCS5/22/2(j) (West 2000)) impose a legal obligation of compliance.However, we also agree with CLMI that insureds ought not be ableto act entirely unilaterally to undertake environmental cleanup andthen to obtain indemnification on the basis that they were legallyobligated to do so. If no third party asserts a right to the damages, thepayment is merely gratuitous.
 

       We conclude, therefore, that the mere existence of suchregulations and the insured’s decision to voluntarily undertakeenvironmental cleanup is not sufficient to invoke the insurer’s duty toindemnify. At a minimum, the insured must be acting in response to aclaim. That is, if a lawsuit or administrative action has not beeninitiated, there must have been at least the assertion of a claim.
 

       In sum, the requirement of a claim as a precondition of a legalobligation to pay damages provides the necessary link between thedamages inquiry, which looks at the nature of the expenditure forwhich the insured is seeking indemnification, and the legal obligationinquiry, which looks at the source of the obligation to pay. By makinga claim, the allegedly injured party (in this case the people of the Stateof Illinois through the IEPA) asserts that the other party is legallyobligated to provide a remedy, in the form of damages, for the allegedinjury. Such a claim need not necessarily be in the form of a demandletter, particularly when the legal obligation being asserted is based ona strict liability statute. See Black’s Law Dictionary 463 (8th ed.2004) (a “demand letter” is a “letter by which one party explains itslegal position in a dispute and requests that the recipient take someaction *** or else risk being sued”).
 

       In the present case, the affidavit of Steven L. Burns reveals thatCILCO was confronted with a claim in the form of an assertion by theIEPA that the agency intended to enforce the strict liability provisionagainst owners or operators of former MGP sites. CILCO was awarethat it owned three such sites, one of which was already leaking intothe surrounding soil and the others presenting the threat of leakage.The IEPA official tacitly threatened litigation by making the “easy wayor the hard way” remark. This is sufficient to satisfy the requirementof a claim at this stage of the proceedings. That is, for purposes of itsmotion for summary judgment, CLMI has asserted that there is nosubstantial question of material fact. Outboard Marine, 154 Ill. 2d at102. We find that the facts asserted in the affidavit regarding thesubstance of the meeting are sufficient to satisfy the requirement of aclaim.
 

       We, therefore, hold that under the facts as alleged, CILCO wasoperating under a legal obligation when it agreed to participate in thevoluntary cleanup program. If the funds expended can properly becharacterized as damages, CLMI must indemnify CILCO.

3. Construing the Term “As Damages”
 

       As noted above, CLMI argues that the appellate court erred byconstruing the term “damages” apart from the terms referring to alegal obligation to pay. Having concluded thus far that therequirement of a claim provides the necessary link between these twoconcepts, we consider whether the costs incurred by CILCO for astatutorily mandated environmental cleanup in response to IEPA’sclaim may be considered “damages,” as opposed to some other formof expenditure.
 

       CLMI accurately points out that business entities are legallyobligated to make all sorts of payments and that the mere fact thatthese payments are made pursuant to a legal obligation does not meanthat they are paid “as damages.”
 

       We agree. One may be legally obligated to pay taxes, to pay finesor penalties, or to pay debts. Damages are distinguished from othersorts of payments by their remedial purpose. The language of the Actmakes the remedial purpose of the cleanup expenditures clear. Itimposes liability for “all costs of removal or remedial action” (415ILCS 5/22.2(f) (West 2002)), and refers to the “costs and damages”provided for in this section (415 ILCS 5/22.2(i) (West 2002)).
 

       The policy language, which limits indemnification to “damages onaccount of” bodily injury or property damage, defines what specifictypes of damages CLMI must indemnify. Not all damages that CILCOmay become legally obligated to pay are covered by the policy.
 

       We conclude that these expenditures were made in response toa claim of strict liability, asserted by the IEPA against CILCO, andthat they were made for a remedial purpose. As such, they constitutedamages within the plain meaning of the policies.

4. Public Policy
 

       Both CLMI and CILCO urge this court to take public policyconcerns into account in construing the language of the CLMIpolicies. The relevant public policies include giving effect tocommercial expectations, on the one hand, and, on the other,encouraging polluters to take swift remedial action upon becomingaware of environmental contamination and discouraging them frominviting a lawsuit for the sole purpose of obtaining indemnificationfrom their insurers.
 

       However, the question presented in this case, while complex, ismerely one of construction of the language of an insurance policy. Theterms of the policies are either plain in their meaning, in which casethey will be given effect unless they violate public policy, or else theyare ambiguous and may be construed against the drafter. We are notpermitted to rewrite the language of the policies agreed upon by theparties simply to suit our idea of desirable social goals.
 

       We have concluded that when the type of property damage fallswithin the scope of the policy, a claim for damages is made by apotential plaintiff, and the insured is legally obligated by virtue of astrict liability statute to provide a remedy, the language employed inthe CLMI policies requires indemnification. Any effect of this holdingon CLMI or the insurance industry as a whole can be remedied by thedrafting of more specific policy language. Any effect on the incentivesthat exist for polluters to act promptly upon learning of environmentalcontamination can be addressed by the legislature.

CONCLUSION
 

       We agree with the appellate court that the circuit court erred ingranting summary judgment to CLMI on the issue of indemnification.Based on the record at this stage of the proceedings, the expendituresmade by CILCO are “damages” as that term is used in the CLMIcontracts because they were paid in response to a IEPA claim for thepurpose of remedying damage to property. We further hold thatCILCO was legally obligated to make these expenditures because theAct imposes strict liability for the claimed harm and because it wouldhave been futile for CILCO to deny its liability. We express no opinionon the reasonableness of the expenditures.
 

       The judgment of the appellate court, reversing the circuit courtand remanding for further proceedings, is affirmed.

Appellate court judgment affirmed.

       JUSTICE KILBRIDE took no part in the consideration ordecision of this case.