The Virginia Supreme Court's decision to rehear a climate change suit has cast uncertainty on what little judicial guidance exists on the issue of insurance coverage in climate change cases, BusinessInsurance.com reported.

The court said last week that it will reconsider its earlier decision to uphold a lower court's ruling that Steadfast Insurance Co. has no obligation to indemnify Arlington, Va.-based energy company AES Corp. in a climate change suit.

The court decided last month to set aside its September judgment upholding the lower court verdict and said it would hear oral arguments on the rehearing when its next session begins Feb. 27.

The case is seen as significant, as it is the first involving insurance coverage for a climate change liability suit.

Attorneys representing AES and Steadfast declined to comment.

However, lawyers familiar with climate change litigation were somewhat surprised by the court's decision to revisit the case, having assumed it was concluded when the court decided in September that there was no coverage.

"If we were AES, we would be somewhat optimistic," J. Wylie Donald, a Wilmington, Del.-based partner at McCarter & English LLP. who represents insurers, said in his blog, ClimateLawyers.com.

Since the case seeks defense cost coverage, "there's something good that's going to come out of this for policyholders," Donald said.