Natural Disaster Seasons (NDS, i.e. Flooding, Tornados, Forest Fires, Hurricanes…) are a great time to talk pollution. Did you know most pollution policies do not exclude Acts of God.
During NDS, national and local media are lighting up the airways / internet highway with all the pollution problems caused by a natural disaster. You hear about storage tanks releasing their contents as debris crashes into them during flood season. Pollutants spread out over miles from tornados or hurricanes. Forest Fires engulfing communities and causing explosions that release pollutants in the air and the list goes on.
Note: Pollution losses tend to be a severity versus frequency issue.
Businesses to strategize on the value pollution insurance adds to their business model during NDS are those that feel they do not have a pollution exposure. For this example let’s use real estate owners. For sake of avoiding an argument, agree with the real estate owners they do not have a pollution exposure, but then ask, what if a natural disaster deposits pollutants on your real estate? As we move into spring the thoughts of melting snow carrying contaminants to nearby waterways to be deposited downstream during flood season to unsuspecting real estate owners in one simple example.
Note: Under federal law, the real estate owner is ultimately responsible for the environmental condition of their property.
It may not be until years later when the real estate owner goes to sell their property and an environmental site assessment unveils an environmental problem from pollutants deposited during NDS. Whose responsible?
Since every business is impacted by environmental exposures, it’s now part of “Best Practices” for businesses to have a financial assurance strategy in place to address their exposure to environmental liabilities caused by Natural Disasters.
NDS and pollution insurance go together like April showers that bring May flowers.