Presstek sues insurer over chemical spill

Presstek Inc. is suing its insurer, Continental Casualty Company, to cover costs involved with a chemical spill in a South Hadley, Mass., plant that occurred on Oct. 30, 2006.

The Hudson-based printing equipment manufacturer, in a suit that was recently moved to federal court, said that losses related to the cleanup, equipment repair and business interruption wholly inside the building, cost the company $3.5 million.

The spill also caused the evacuation of 90 residents and closed public schools the following day. The Environmental Protection Agency, in an administrative complaint against Presstek in February, charged that Presstek didn’t initially notify the National Response Center of the release as required by law.

The EPA eventually fined the company $80,000 in May, and Presstek paid $32,000 to settle with the town at the end of August. To mitigate the EPA fine, the company agreed to pilot a “green chemistry” curriculum at a local school, a project worth about $70,000.

In its suit against Continental, Presstek said its $125 million policy covers losses due to pollution or contamination, but insurance company disputed how extensive that coverage is. Continental also disputes whether its computer equipment is covered. After negotiations failed to resolve the matter, Continental put forth a “drop dead” settlement offer that offers “unspecified damages within the building” but not insure “land and water” outside the building.

Presstek filed a suit with Hillsborough County Superior Court on Sept. 12 that was transferred to federal court Oct. 9. The insurance company must respond by Nov. 3. The suit does not specify the amount sought.

Presstek discontinued analog operations at the Hadley plant, completing an already ongoing transition to digital printing press. In a recent press release, the company emphasized the environmental and economic benefits of its “chemistry-free” presses and equipment, which “are not only good for the environment; they also enable printers to be more capable, profitable, and competitive.”

Bob Sanders can be reached at