The article below talks about a fire that took place at a company that produces plastic products. The fire started when a power line fell into a storage area containing plastic sheeting.
Below are a few environmental issues I want to strategize on related to fires.
- When plastics burn, they give off toxic fumes and it burns very hot, so in this situation, fire fighters needed to use PFAS containing foam to put out the fire. There are over 4,000 PFAS chemicals in use and every business has on their premises an array of products containing PFAS chemicals. As the fire is extinguished, PFAS chemicals will be released into the ground, surface & ground water, air and migrate over land to neighboring properties. Every business owns a lot of plastic containing assets such as computers & monitors, waste baskets, packaging, totes, barrels, phones, copy machines & printers, furniture, shelving….
- After a fire, the resulting contamination from burning materials, firefighting foam needs to be cleaned up. Do the fire policies you sell offer enough or any coverage at all for pollution cleanup that results from a fire? You need to make sure your insureds have an environmental financial assurance plan in place to address their exposure to pollution liabilities as a result of a fire. In addition to clean up, pollution liability policies cover insureds for defense costs, third party bodily injury, business income, property damage, reputational risk and much more. Environmental insurance policies cost the insured fractions of a cent on the dollar versus 100 cents on the dollar out of their own pocket if they self-insure. Or worse yet, your E&O insurance if you did not advise them as their professional risk manager on the need for an environmental financial assurance plan after a fire versus unknowingly self-insuring.
- For businesses that experience a fire, it can create a reputational risk / image restoration for the businesses, even if it was not their fault. Many environmental insurance carriers offer reputational risk costs in their pollution policies because they have seen firsthand the reputational damage on businesses as a result of a fire. Reputational risk / image restoration provides coverage for expenses incurred arising out of damages to the insured’s reputation or consumer confidence as a result of contamination that results in bodily injury, property damage, or remediation expense covered under the policy.
As the article points out, residents in the area reported they were concerned for their health from the contaminated smoke. It was reported the smoke plume from the fire could be seen “throughout North Texas”. Some of the most toxic chemicals and gasses found in smoke include hydrogen cyanide, phosgene, dioxins, furans, sulfur dioxide, PCBs, hydrochloric and sulfuric acid, and arsenic. Other toxins may include benzene, lead, chromium, and other metals, toluene, acrolein, mercury, formaldehyde, phenol, styrene and polycyclic aromatic hydrocarbons.
As you read the article you can see the dollar signs growing right to the end where they point out “The Texas Commission on Environmental Quality are continually checking air quality conditions and the state will provide any necessary resources”. Who will be compensating Texas after they supply the “necessary resources”? Cha-ching $$$, another cost environmental insurance policies can cover.