Common environmental exposures encountered with hunting and fishing clubs include: natural resource damages; storm water runoff; historical pollution from mining, landfills, manufacturing, government facilities, agriculture, scrap yards, old equipment; illegal disposal of waste; improper treatment and/or disposal of sanitary wastewater facilities; nuisance odor claims; fuel spills from recreational equipment; under ground or above ground storage tank leaks causing water and soil contamination; abandoned underground storage tanks especially those of which the site owner is unaware or those which have been improperly closed; improper secondary containment at bulk aboveground liquid storage tanks; lead paint; asbestos; no auditing of waste handling and disposal companies; improper management of protected or sensitive areas such as wetlands; siltation of nearby streams, rivers, or lakes; improper erosion control management; electrical equipment containing toxic PCBS; old, abandoned wells which are not properly closed and serve as an open conduit for groundwater contamination; poor information on the possible adverse reactions and interactions of chemical compounds that accidentally commingle during a fire; old septic systems; pressurized gas cylinders; loading and unloading products from tucks and barges; pollution from neighboring properties which causes soil, surface water or ground-water contamination; easements that cross the property which may leak or spill hazardous materials; residual contamination such as fertilizers or pesticides from past farming or similar uses; previous spills of hazardous materials from adjacent roads or railways due to truck or train accidents; corroded wastewater and storm water sewers; improper purging of bilge waters from marine vessels; spills and air emission from power generators….
Environmental Liability Claims For Hunting And Fishing Businesses:
1. Illegal disposal of waste is second to making a profit behind the sales of illegal drugs. In one case, a hunting club in a remote area, the owner discovered several piles of unidentified waste that had been dumped on the property. The owner had the piles tested, at a cost of several thousand dollars. The piles were determined to contain hazardous waste. The owner’s cost to dispose of the waste was estimated to exceed $250,000.
2. Clean Property; Phase I and Phase II environmental assessments involve limited sampling of a property and cannot guarantee that the property is clean. For example, a hunting/fishing business, acquired property previously used for farming. An environmental consultant was hired to conduct a Phase I Environmental Assessment. The property was determined to be “clean.” However, during excavation for a building, 100 drums of buried pesticides and herbicides were unearthed. The chemicals contaminated the soil and had to be removed. Remediation and drum disposal costs exceeded $750,000
3. A hunting fishing business in their maintenance garage changed the oil for its equipment over a drain leading to an on-site septic system. Over time, the septic system leach field migrated into the surrounding soils and groundwater. Site remediation involved soil removal and installation of a groundwater recovery system. The costs exceeded $720,000.
4. Up stream from a fishing lodge served as a convenient illegal disposal site for a recycling contractor. The contractor dumped five 55-gallon drums, releasing 275 gallons of used mineral spirits into the stream. When the drums were dumped, the hazardous contents leaked into the soil. In addition, the contractor emptied the contents of the vacuum truck into a nearby community lake. Total cleanup expenses amounted to $475,000.
5. A fishing camp operated its own on-site wastewater treatment facility. Seals on the bottom of the treatment system leaked and wastewater overflowed from the top of the system. This caused numerous discharges of contaminated effluent to enter the soil and migrate into the nearby lake. The EPA cited the fishing camp for various discharge violations and issued an administrative order finding the fishing camp responsible for contamination of the adjacent properties. Government mandated cleanup costs exceeded $250,000. In addition, neighboring property owners filed claims against the fishing camp for property damage, business interruption and trespass of pollutants. The combined total of the civil suits exceeded $500,000.
Risk Transfer Strategies
The majority of hunting and fishing clubs operating today, lack the financial strength to self insure their environmental liabilities. Consideration should be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy.
Consider the three main benefits environmental liability insurance affords:
- Coverage includes defense cost. Environmental liabilities are relatively new and very litigious. Even if you do nothing wrong you can still get named in a suit and have to expense defense dollars to get released. At one time, Superfund had .83 cents of every dollar going to legal fees, and only .17 cents for actual cleanup. When you realize the average Superfund site cost in excess of $30,000,000 to clean up, you can begin to understand just how big of a factor defense costs play in your risk transfer strategy.
- All policies come with experts to assist you in handling the claim. Anytime you can have the EPA, state and local environmental officials along with the press pounding on your door, this is not a fender bender, you need experts to assist you in running damage control central.
- The majority of the time the cost to clean up the environmental problem/s is far less than the associated claims that come in from third parties, mainly for business interruption. You need to look at the customers and neighbors that can be impacted should an environmental loss occur. Who can you impact should you or a sub-contactor/vendor cause an environmental liability?
Risk transfer products for hunting and fishing businesses:
PROPERTY TRANSFER COVERAGE
When buying or selling property their can be unknown preexisting environmental conditions. Since a Phase I or Phase II survey cannot guarantee uncovering all potential environmental liabilities, insurance companies have created property transfer insurance. This coverage protects the new owner or any party with an insurable interest, against unknown environmental conditions that may be discovered during the policy period, that were not caused by the new owner. This coverage not only helps to keep the property at its maximum value, it will assist the purchaser in being able to secure the necessary financing to complete their transaction.
ENVIRONMENTAL IMPAIRMENT LIABILITY (EIL)
EIL is for hunting and fishing businesses susceptible to economic loss caused by pollution that actually or allegedly originated from their operations. Sometimes referred to as pollution legal liability this coverage is for those who own, operate, lease, or have any other insurable interest in real property and the operations. Coverage can be written in a variety of ways addressing unknown preexisting conditions or new conditions. Coverage can include third party bodily injury and property damage along with business interruption and extra expense, on and off site clean up costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multi year terms. Most EIL policies cover above ground storage tanks.
TRANSPORTATION POLLUTION LIABILITY
Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of their cargo. Broadened auto pollution liability (typically Form CA 9948) affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and over turn of transported cargo.
UNDERGROUND STORAGE TANKS
Financial responsibility requirements ensure that owners and operators of underground storage tank systems have the ability to financially handle a release from an underground storage tank. The responsibility encompasses the ability to pay funds for corrective action and third party bodily injury and property damage from non-sudden and sudden and accidental releases from a regulated underground system.
Vendor Insurance Coverage’s:
If you contract engineering/laboratory or contracting services, you should confirm the vendor has professional liability including pollution and/or contractors pollution liability coverage. If the vendor is a transporter refer to transportation pollution liability above.
