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  • Beverage Distributors

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Most commercial insureds assume that claims arising from their operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves commercial insureds with gaps in coverage. What pollutants are impacting your business? 

    Environmental Exposures Impacting Beverage Distributors 

    May include, but are not limited to; Pollution liabilities that occur while transporting cargo;  Spills from underground and/or aboveground storage tanks;  No secondary containment for above ground storage tanks;  Vapor intrusion;  Pollution cleanup costs after a fire;  Spills or leaks from the storage and handling (loading/unloading) of material containers such as drums, totes or bags from vehicles;  Parking equipment over unsealed surfaces allowing contaminants such as oil, fuel, anti-freeze, hydraulic fluids, asbestos… to pollute the ground;  No emergency response training for employees;  Accumulated old tires, batteries, equipment…;  Raw materials stored;  Inadequate or no auditing of hazardous and non-hazardous waste handlers, transporter and disposal companies;  Adverse reactions of materials that commingle during a fire;  Stormwater runoff;  Utilities that cross your property;  Corroded wastewater and storm water sewers;  Natural resource damages;  Asbestos;  Lead;  Silica;  Mold / Legionella;  Illegal dumping of waste on your property by unknown 3rd parties;  Pollutants from neighboring properties migrating onto yours and more…

    Environmental Claims Scenarios

    1. A fire ignited at a wine distribution facility. Water used by the fire department to extinguish the flames became contaminated by a toxic slurry like mixture from the melting materials inside the building. The high-pressure hoses forced the contaminants to flow off the property, which included a local stream. Emergency remediation contractors began investigating and found that the pollutants had entered the stream and had flowed downriver into a lake. The distributor was held liable for the claim, which included natural resource damages (including loss of aquatic life), investigation, remediation, 3rd party bodily injury from toxic fumes, and 3rd party business interruption claims as local businesses were forced to shut down during the cleanup. Total cost of the loss exceeded $6M. NOTE: fire departments are immune to pollution claims arising from their work while putting out fires.  
    2. Loading/unloading of products and material over unsealed truck ramps, over a period of several years, ground water became contaminated from pollutants that were released from idling trucks and storm water runoff.  Since the ground water was the only source of drinking water for surrounding residents and the state environmental regulatory agency designated the distributor as the responsible party, the distributor had to pay over $1,400,000 in cleanup costs and supply drinking water until the local municipality could extend water services out to the surrounding residents.  
    3. The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank used for a trucking fleet was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils and required costly excavation and removal. The total cost for investigation, removal and disposal exceeded $320,000.
    4. An employee at a beverage distribution facility discovered several totes of unidentified waste that had been illegally dumped into the facilities dumpster. The owner had the contents tested, at a cost of several thousand dollars. The totes were determined to contain hazardous waste, which were placed in the dumpster by an unknown 3rd party. The distributor’s cost to properly dispose of the waste exceeded $100,000. 
    5. A 1,000-gallon diesel aboveground storage tank used for the backup power generator for a liquor and wine distribution facility was in a concrete secondary containment that was cracked. A rupture of the tank spilled 700 gallons into the containment that seeped into the ground causing excavation and disposal of the contaminated soils along with engineering and legal fees exceeding $90,000.  
    6. A delivery truck got into an accident and caught on fire.  The burning cargo created toxic fumes and when the fire department put out the fire it created contaminant runoff that flowed into a nearby stream.  Cost to remediate the site and claims from third parties for bodily injury and property damage due to exposure to toxic fumes exceeded $800,000.
    7. While transporting products over the road, the driver got into an accident and overturned. The products being hauled escaped the trailer and ended up in a nearby stream. Costs for remediation and natural resource damages exceeded $85,000. 

    Overlooked Benefits of Environmental Liability Insurance

    Unlike most liability exposures impacting beverage distributors, pollution losses are not a frequency risk, but rather a severity risk. Since every beverage distributor is impacted by environmental liabilities, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insuring. 

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often times the clean-up costs are far less than other costs that often arise from the loss.

    Three Overlooked Benefits of Environmental Liability Insurance 

    • Defense Costs:  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 costs i.e. legal fees, environmental investigations, etc.  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  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 for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Products

    Transportation pollution Liability 

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or releases of transported cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and over turn of transported cargo.  You need to strategize on your exposure to transportation.  How are goods received?  FOB point of Shipment or FOB point of delivery?  Do not be confused by thinking the MCS-90 endorsement is auto pollution liability coverage.  

    Environmental Impairment Liability (EIL) 

    EIL is for food distributors susceptible to economic loss caused by pollution that actually or allegedly originated from their properties.  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/or 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 cleanup costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multiyear terms.  Most EIL policies cover above ground storage tanks.  You can cover multiple locations on a single policy.

    Underground Storage Tanks

    Storage tank financial responsibility requirements ensure that owners/operators of underground storage tank systems can financially handle a release from the tank system. 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 tank system.  

    Real estate developers/owners with a financial responsibility strategy dependent upon state UST funds need to regularly confirm fund solvency and length of time it will take to get reimbursed.  If part of your business strategy depends upon the state fund, this means just that, you are putting the future success of your business in the hands of the state.  You need to strategize on “just how strong is your business” if you are putting its future in the hands of your state government. 

    Property Transfer Coverage

    Note:  This coverage is designed for buyers or sellers of real properties.

    When buying or selling property there can be unknown preexisting environmental conditions. Since environmental due diligence (All Appropriate Inquiry (AAI), a Phase I or Phase II survey, Baseline Environmental Assessment (BEA)….), 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.  You can cover multiple locations on a single policy.

  • Auto Salvage Yards

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. In other words, something that ends up where it doesn’t belong. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Most commercial insureds assume that claims arising from their operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves commercial insureds with gaps in coverage. What pollutants are impacting your business?

    Environmental Exposures Impacting Auto Salvage Yards  

    Automobile parts cover a variety of segments, each facing their own unique environmental exposures, including metals, ceramics, plastics, rubber, textiles, batteries, electronics, oils, lubricants, etc.  Many of these segments utilize hazardous materials that produce hazardous wastes, & must be handled properly throughout the salvaging process.                                                                                                          
    Environmental exposures may include, but are not limited to: Soil and/or ground water contamination from mercury, lead, cadmium, asbestos, oil, anti-freeze, hydraulic fluids, gas or diesel fuel, PCB’s, solvents etc.; Devaluation of property value due to a buyer’s concern of known or perceived pollution conditions;  Pollution conditions as a result of a fire;  3rd parties illegally placing waste on your property (midnight dumping);  Storm water runoff; Releases from above ground or underground storage tanks; Inadequate secondary containment for above ground storage tanks;  Air emissions; Non-owned offsite disposal sites;  History of on-site spills; Transportation of potentially hazardous materials/wastes;  Inadequate auditing of hazardous and non-hazardous waste handling and disposal contractors;  Loading and unloading from trucks over unsealed ground;  Older equipment;  Legal defense for 3rd party nuisance claims;  and more… 

    Environmental Claim Scenarios 

    1. After a river experienced a sudden, major fish kill that left 61 tons of fish dead, EPA officials traced the source of contamination to a nearby scrap yard that stored hazardous waste in 55 gallon drums.  During a heavy rain, the ground washed away under the barrels releasing the contents. The scrap yard was found liable for clean-up, third-party damages, and natural resource damages. Total cost of the claim exceeded $10,000,000. 
    2. A scrap yard had been in operation since 1947. Over the years, numerous owners used underground storage tanks to store petroleum products. Local residents began to complain about the quality of their water. Testing revealed petroleum contaminants in the groundwater and identified the scrap yard as the source of the pollution.  Further investigation revealed that underground storage tanks had succumbed to corrosion and cracking.  The contaminated groundwater entered breaks in nearby water distribution lines, polluting the drinking water supply.  The scrap yard paid out over $5,000,000 in clean-up costs, and 3rd party bodily injury claims. 
    3. An auto salvage yard hired a waste hauler to transport their waste to a 3rd party disposal site. During transportation, the hauler got into an accident, causing the truck to overturn and spills its load into a nearby stream.  Under CERCLA, commercial insureds must contribute for their apportionment of the load for cleanup cost since federal law states that you own your waste from cradle-to-grave.  Cost to settle the claim for the for the salvage company was $700,000. 
    4. At a 26-acre site used as an auto salvage yard the EPA discovered over 600 rusting buried drums of chemicals.  The barrels were illegally disposed on the property by the previous owner who had since passed away.  Nearby resident’s field suit for perceived bodily injury from drinking the contaminated ground water.  The auto salvage yard faced a multi-million lawsuit, alleging liability for bodily injury, property damage, and cleanup.
    5. An Auto Salvage facility caught on fire. The fire department’s high-pressure hoses forced melting plastics, metals, insulation, roofing, drywall, chemicals, and other materials to build up inside the building’s foundation, creating a toxic “sludge”. Some of the “sludge” escaped the building and migrated onto to neighboring properties. The property owner was responsible for clean-up, 3rd party property damage & business interruption, and natural resource damages, which totaled over $3,500,000.  NOTE: fire departments are immune to pollution claims arising from their work while putting out fires.
    6. An auto scrap yard was sued when pollutants were discovered in the soil at a neighboring property. After further investigation, it was determined that the pollutants were due to industrial operations that took place on the property by a previous owner. Under federal law, real estate owners are responsible for the environmental condition of their property, regardless of who caused the pollution or when it occurred. Total cost of the remediation for the scrap yard exceeded $2,500,000. 
    7. A scrap yard routinely filled & stored barrels of waste such as fuel, oil, anti-freeze, paint thinners, metal cutting oil, and solvents….  While loading about 1,000 pounds of potentially hazardous waste onto a truck, five barrels slipped off the fork lift releasing the contents.  Fortunately for the scrap yard they had an emergency response plan in place, and their emergency response team contained the contaminants.  Cost of clean-up $70,000.
    8. When arriving at work one morning, an employee at an auto salvage company discovered that several totes of unidentified waste had been illegally placed on the property my unknown 3rd party during the night. The totes were not leaking, but had to be properly disposed of at the salvage yard’s expense, at a cost of over $50,000. 
    9. An auto salvage yard was sued when contamination was discovered in the drinking water at a new residential development. That the auto salvage yard was not the source of the contamination, and they were released from the lawsuit. However, they had already expensed over $100,000 in legal defense costs fighting the suit.  

    Overlooked Benefits of Environmental Liability Insurance

    Unlike most liability exposures impacting Auto Salvage Yards, pollution losses are not a frequency risk, but rather a severity risk. Because all Auto Salvage Yards have notable environmental exposures, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insurance.

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often the clean-up costs are far less than other costs that can arise from the loss. 

    Overlooked Benefits of Environmental Liability Insurance:  

    • Defense Costs:  Environmental liabilities are relatively new and very litigious.  Even if you do nothing wrong you can still get named in a suit and must expense defense costs (legal fees, environmental investigations, etc.)  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who oversees communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  Most 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 for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.        

    Environmental Liability Insurance Coverages

    Premise Pollution Liability (PPL)

    PPL is for automotive salvage yards susceptible to economic loss caused by pollution that actually or allegedly originated from their operations. 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. PPL can be offered on multiyear terms.  Most PPL policies cover above ground storage tanks.

    Transportation Pollution Liability (TPL)

    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 can 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.  

    Pollution Prevention Strategies for Automotive Salvage yards

    • Cover all solvent containers and turn off your solvent sink when not in use. Solvent losses from evaporation and spills can range from 25 percent to 40 percent. 
    • Always use spring-loaded funnels/pumps to dispense & collect fluids such as antifreeze, solvents, & used oil. 
    • Recycle used oil, antifreeze and solvents. Recycle filters after drip draining or spinning out the oil. 
    • Use a filter on parts cleaners to extend the life of the solvent. Use dirty solvent when first cleaning parts. 
    • Consider using burnable absorbents to clean up used oil. Often your used oil hauler can recycle them as well as your used oil. 
    • Pre-rinse parts before using hot tanks or jet spray washers. 
    • Switch to a recirculating spray cabinet for cleaning parts instead of using solvent or hot tanks. 
    • Use solvent distillation service for solvent-based cleaners, which can be reused at a cost savings to your shop. 
    • Keep hazardous and non-hazardous wastes separate to minimize disposal costs. 
    • Maintain an accurate record or inventory to prevent overstocking of hazardous materials. 
    • Remove parts slowly after they have been in solvent tanks to prevent spillage. 
    • Use drip pads and pans to catch leaking fluids when working on vehicles. 
    • Immediately clean up spills with rags or dry absorbent. 
    • Store solvents and used shop towels in metal cabinets and keep away from heat sources.
    • Use a rag service for shop towels to reduce oily dumpster waste and a “throw it away” attitude.  
    • Seal floor drains to prevent materials from entering the sanitary or storm sewers. 
    • Don’t wash off your parking lots and garage bays into grease traps, sumps or storm drains. Keep run-off to a minimum by using dry cleaners and absorbents to clean up any spills.

  • Auto Dealers & Service Garages

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. In other words, something that ends up where it doesn’t belong. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Most commercial insureds assume that claims arising from their operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves commercial insureds with gaps in coverage. What pollutants are impacting your business?

    Environmental Exposures Impacting Auto Dealers & Service Garages

    Nationwide, car and truck dealerships, service stations, and garages take care of the maintenance and repair of millions of vehicles every year. In every area of vehicle servicing, repair, and body shop operations there is potential for environmental risk. Dealerships and garages are responsible for proper storage and disposal of their hazardous waste on site and at off-site treatment, storage or disposal facilities. Environmental Insurance provides the financial assurance needed for sustainability in today’s social/business environment. 

    Environmental exposures impacting car dealerships may include, but are not limited to;  Leaking underground fuel and waste oil storage tanks; Untested underground fuel & waste oil/solvent tanks and pipes; Underground tanks which were removed/abandoned; Lack of information on existing and former underground tanks (e.g. age, contents, size, construction, cathodic protection, etc.); Poor housekeeping resulting in oil, fuel, parts cleaning solvents, and paint being spilled on unpaved areas;  Leaking grease traps or oil/water separators that seriously pollute the soils and/or groundwater;  Leaks from elevator hydraulic fluid storage tanks;    Accumulated old batteries which contain leached acidic liquids;  Wastewaters flowing from service bays into the sanitary sewers;  Electrical equipment containing PCBs;  Paint residues from the body shop washed into storm drains; Wash waters from a car wash discharged into a storm sewer;  No auditing of waste handling and disposal companies;  Poor information on the possible adverse reactions and interactions of chemical compounds that accidentally commingle during a fire.  Some of the pollutants these operations are impacted by include asbestos, lead, mercury, cadmium, oil, diesel, etc.;  and more…

    Environmental Claim Scenarios

    1. An auto dealership had a wash bay’s piping system that released a substantial amount of cleaning solvents into soil and ground water.  The cost to remediate the cleaning solvents, soil and ground water cost $250,000.
    2. While working on renovations at an auto dealership, an excavation contractor was subject to cleanup costs and business interruption expenses in excess of $500,000 when they ruptured and unmarked natural gas pipeline.  The contractor was forced out of business, leaving the property owner with the bill. 
    3. During the night, an unknown party illegally placed drums of hazardous waste into a dumpster behind at an auto dealership.  The containers were not leaking, but the cost to properly dispose of the illegally dumped waste cost the auto dealer roughly $50,000. 
    4. The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment, 3,000 gallons of which entered the surrounding soils. The total cost of investigation and remediation exceeded $200,000.  
    5. An auto dealer was expanding their showroom. During excavation, petroleum hydrocarbon contamination was discovered in the soil.  Cleanup costs exceeded $200,000. 
    6. A service garage had a waste hauler that was transporting its used motor oil overturn and spills its load into a nearby stream.  Under CERCLA, the service station must contribute for their apportionment of the load for cleanup cost since federal law states that you own your waste from cradle to grave.  Cost to settle the claim for the service station was $600,000.
    7. During the night, a fire broke out at an auto dealership. As the fire department put out the fire, their high-pressure hoses forced melting plastics, metals, insulation, roofing, drywall, chemicals, oils, and other materials to build up inside the building’s foundation, creating a toxic “sludge”. Some of the toxic “sludge” escaped the building and migrated onto to neighboring properties. The auto dealer was responsible for all clean-up costs, 3rd party property damage, 3rd party business interruption, and natural resource damages, which totaled over $5,000,000.  NOTE: fire departments are immune to pollution claims arising from their work while putting out fires.  
    8. An auto dealership was sued when contamination was discovered in the drinking water at a new residential development. After further investigation, it was determined that the pollutants were not used as part of the auto dealer’s operations, so the auto dealership was not the source of the contamination, releasing them from the lawsuit. However, the auto dealership had already expensed over $75,000 in legal defense fighting the claim. 

    Overlooked Benefits of Environmental Liability Insurance

    Unlike most liability exposures impacting auto dealers, pollution losses are not a frequency risk, but rather a severity risk. Because all auto dealers have notable environmental exposures, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insurance.

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often times the clean-up costs are far less than other costs that can arise from the loss. 

    Three Overlooked Benefits of Environmental Liability Insurance:  

    • Defense Costs:  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 costs i.e. legal fees, environmental investigations, etc.  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  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 for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Products

    Environmental Impairment Liability (EIL)

    EIL is for businesses that are 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 cleanup 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 (TPL)

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of their cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and over turn of transported cargo.

    Underground Storage Tanks (UST)

    Financial responsibility requirements ensure that owners and operators of underground storage tank systems can 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.

    Contractors Pollution Liability (CPL)

    Contractors Pollution Liability (CPL) insurance protects the insured should they cause or exacerbate an environmental condition while performing their contractor services.  CPL protects the insured for covered operations performed by or on behalf of the insured, while operating away from any premises they own, rent, lease or occupy.

    Auto dealers and service garages have potential indirect environmental exposures from the service vendors & contractors they hire to perform work on their behalf.  CPL insurance protects real estate owners / developers should their vendors cause or exacerbate an environmental condition. 

     

  • Auto / Equipment Servicing & Repair Garages

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. What pollutants are impacting your business?

    The Need for Environmental Insurance

    Nationwide, auto / equipment service stations & repair garages take care of the maintenance and repair of millions of vehicles every year. In every area of vehicle servicing, repair, and body shop operations there is potential for environmental risk. These insureds are responsible for proper storage and disposal of their hazardous waste on site and at off-site treatment, storage or disposal facilities. Environmental Insurance provides the financial assurance needed for sustainability in today’s social/business environment.   

    Environmental Exposures Impacting Auto Servicing & Repair Garages

    Include, but are not limited to;  Leaking underground fuel and waste oil storage tanks; Untested underground fuel & waste oil/solvent tanks and pipes; Underground tanks which were removed/abandoned; Lack of information on existing and former underground tanks (e.g. age, contents, size, construction, cathodic protection, etc.); Poor housekeeping resulting in oil, fuel, parts cleaning solvents, and paint being spilled on unpaved areas;  Leaking grease traps or oil/water separators that seriously pollute the soils and/or groundwater;  Leaks from elevator hydraulic fluid storage tanks;    Accumulated old batteries which contain leached acidic liquids;  Wastewaters flowing from service bays into the sanitary sewers;  Electrical equipment containing PCBs;  Paint residues from the body shop washed into storm drains; Wash waters from a car wash discharged into a storm sewer;  No auditing of waste handling and disposal companies;  Poor information on the possible adverse reactions and interactions of chemical compounds that accidentally commingle during a fire.  Some of the pollutants these operations are impacted by include asbestos, lead, mercury, cadmium, oil, diesel, etc.

    Environmental Loss Examples

    1. An auto service station had a waste hauler that was transporting its used motor oil overturn and spills its load into a nearby stream.  Under CERCLA, the service station must contribute for their apportionment of the load for cleanup cost since federal law states that you own your waste from cradle to grave.  Cost to settle the claim for the service station was $600,000. 
    2. A waste system for an auto body shop released contaminates into a nearby neighborhood’s drinking water.  The local regulatory agency designated the body shop as a responsible party.  The contribution to settle the claim was $340,000.
    3. An automobile garage had a wash bay’s piping system that released a substantial amount of cleaning solvents into soil and ground water.  The cost to remediate the cleaning solvents, soil and ground water cost $250,000.
    4. While working on renovations at an auto garage, an excavation contractor ruptured and unmarked natural gas pipeline.  The contractor was liable for the costs associated with the cleanup, project delays, and two weeks of interrupted business sustained by the auto garage while the situation was being handled. The contractor did not have Contractors Pollution Liability insurance. Due to the size of the claim the contractor was forced out of business, leaving the auto garage with over $75,000 in lost revenue and clean-up costs.  
    5. The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils and required costly excavation and removal. The total cost for investigation, removal and disposal exceeded $320,000.  
    6. An unknown party illegally placed drums of liquid waste into a dumpster at a behind an auto repair & service garage.  The drums were not leaking, but had to be properly disposed of. Cost to dispose of the drums exceeded $20,000. 
    7. While moving a large metal coil, a forklift operator hit a hydrofluoric acid aboveground storage tank releasing dangerous fumes into the neighboring community. Area residents and businesses were evacuated and several people were treated at the local hospital for fume inhalation. Claims for bodily injury and business interruption topped $94,000. 
    8. An auto garage’s outdoor scrap yard routinely fills and stores on-site barrels of waste such as fuel, oil, anti-freeze, paint thinners, metal cutting oil, and solvents….  While loading about 1,000 pounds of potentially hazardous waste onto a truck, five barrels slipped off the fork lift releasing the contents.  Fortunately for the scrap yard they had an emergency response plan in place and their emergency response team was able to contain the contaminants.  Cost of clean-up $70,000.

    Overlooked Benefits of Environmental Liability Insurance

    Auto / Equipment Servicing & Repair Garages generally lack the financial strength to self-insure their environmental liabilities.  Since every septic service provider is impacted by environmental liabilities, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy versus self-insurance.

    Three Overlooked Benefits environmental liability insurance offers:  

    • Defense Costs:  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 costs i.e. legal fees, environmental investigations, etc.  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  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 for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.        

    Environmental Liability Insurance Products

    Environmental Impairment Liability (EIL)

    EIL is for businesses that are 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 cleanup 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 (TPL)

    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.

    Contractors Pollution Liability 

    Contractors Pollution Liability (CPL) insurance protects the insured while performing contracting services in the field should they cause or exacerbate an environmental condition. This coverage would be applicable for auto / equipment repair & service operations that provide “in the field” services at their customer’s locations.  

    Auto servicing and repair garages have potential indirect environmental exposures from the service vendors & contractors they hire to perform work on their behalf.  CPL insurance protects real estate owners / developers should their vendors cause or exacerbate an environmental condition.

    Underground Storage Tanks (UST)

    Financial responsibility requirements ensure that owners and operators of underground storage tank systems can 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.

     

  • Asphalt & Paving Contractors

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Many non-environmental contractors assume that claims arising from operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves many of these contractors exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Asphalt & Paving Contractors 

    Include, but are not limited to: air emissions from asphalt plants; transportation of raw materials and asphalt; natural resource damage; storage of raw materials; release of oils/fuels from equipment; spills from mobile storage tanks; excavating through and spreading of unknown preexisting contaminated soil; storm water runoff; ground water contamination; silica; coloring of decorative asphalt; blending & mixing of asphalt. 

    Environmental Loss Examples

    1. A road building contractor unknowingly spread petroleum-contaminated soil across a project site during fill operations for a commercial office building. The contractor was named in a lawsuit for exacerbating the extent of contamination. After lengthy deliberations the contractor was eventually removed from the lawsuit. However, they incurred $90,000 in defense costs. 
    2. An asphalt paving contractor paved a parking lot for a new commercial structure. At the end of the day, the tack coat was sprayed onto the sub-base prior to paving. During the evening, a major thunderstorm caused the tack coat to wash off and flow into a nearby stream. The contractor was responsible for cleanup costs including natural resource damages, which exceeded $200,000.  
    3. An asphalt paving contractor had a piece of equipment puncture a hole in the side of their liquid asphalt truck on a job site.  More than 800 gallons of liquid asphalt was spilled before they were able to contain the release. Clean up costs and business interruption was in excess of $150,000.
    4. Neighbors of an asphalt plant filed a lawsuit for perceived bodily injury due to air emissions from the plant. The owner/operator of the asphalt plant was found liable by the courts. Legal fees and damages were in excess of $1,500,000
    5. Vandals at a jobsite released the contents of an above ground storage tank used to fuel equipment for a street and road contractor. The cost to clean-up the 500 gallons released by the vandals was in excess of $80,000.
    6. A contractor was subject to cleanup costs after vandals opened an onsite mobile refueling tank causing diesel fuel to be released onto virgin soil.

    Benefits of Environmental Liability Insurance 

    Asphalt and paving contractors generally lack the financial strength to self-insure their environmental liabilities.  Since every asphalt and paving contractor is impacted by environmental liabilities consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy versus self-insurance.

    The Three Main Benefits environmental liability insurance offers:  

    1. Defense Costs:  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 costs i.e. legal fees, environmental investigations, etc.  
    2.  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    3. Third Party Liability:  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 for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Coverages 

    CONTRACTORS POLLUTION LIABILITY 

    Contractors Pollution Liability (CPL) insurance protects the insured should they cause or exacerbate an environmental condition while performing their contractor services.  CPL protects the insured for covered operations performed by or on behalf of the insured, while operating away from any premises they own, rent, lease or occupy.

    CPL can be offered on a claims made or occurrence basis.  Coverage can be written on a job specific basis, or on a blanket basis to cover all the work performed by the insured.  Most policies can be endorsed to cover transportation pollution liability.  

    Contractors incorporating CPL coverage as part of their risk transfer strategy, drive their growth and profits by marketing the benefits CPL coverage affords in reducing job interruption due to environmental issues.     

    ENVIRONMENTAL IMPAIRMENT LIABILITY (EIL) 

    EIL is for contractors that own, rent, lease, operate or have any other insurable interest in real property (a fixed site facility such as a shop, asphalt plants….) that can be susceptible to pollution liabilities that actually or allegedly originated from the insured property. 

    Coverage can include: Pre-existing unknown pollution, new pollution conditions, first party on-site clean up, third party bodily injury, property damage, business interruption and extra expense, off site cleanup costs, legal defense expenses, transportation pollution liability, offsite disposal coverage….  Multi year term policies can be negotiated. 

    TRANSPORTATION POLLUTION LIABILITY

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of transported cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and overturn 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 tank system.  

     

  • Aggregate Crushing & Project Waste Management Contractors

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Many non-environmental contractors assume that claims arising from operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves many of these contractors exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures 

    Include, but are not limited to: puncturing unknown underground storage tanks or utilities; release of oils/fuels from equipment; spills from mobile storage tanks; excavating through and/or spreading of unknown preexisting contaminated soil; using unknown contaminated material as fill; storm water runoff; puncturing unknown illegally buried drums or containers; lead; asbestos; silica; no auditing of waste handling and disposal companies; natural resource damages; vapor intrusion; storage and/or transportation of raw materials; business interruption expenses; leaks from hydraulic fluid; products pollution liability; raw materials stored and utilized in large quantities (i.e. acids, bases, compressed gases including cyanide and hydrogen chloride, diesel fuel and lubricant oils, flammable paints and solvents);  uncertainties about the historical use and conditions of property; obsolete and remote equipment storage (bone) yards where contaminants percolate into the soil/groundwater; nuisance odors;  no emergency response training for employees; halon releases from fire suppression equipment; spills and leaks from the storage and handling  (loading/unloading) of material containers such as drums, totes or bags from vehicles and/or rail cars; improper characterization of hazardous waste…       

    Environmental Claim Scenarios

    • A foundry residual recycling operation provided material for a jobsite that contained unknown pollutants.  The excavation contractor unknowingly spread the contaminated material across a project site. Later during the project, the contamination was discovered and determined to have originated from the material. Project delays, cleanup costs, and 3rd party property damage claims exceeded $400,000. 
    • A commercial contractor hired a waste hauler to transport its used equipment oil and fluids. The waste hauler got into an accident which caused the contents of the tanker to be released directly into a creek.  Under Federal law (CERCLA) you own your waste from cradle to grave so the carrier had to pay their apportionment of the remediation costs which totaled $450,000.     
    • A crushing contractor was preparing material for a new commercial project. Over the weekend a major thunderstorm destroyed the storm water runoff control system, causing the material to flow down grade through neighboring properties, roads, and into a nearby lake.  The contractor was responsible for cleanup costs and natural resource damages, which exceeded $2,000,000.  
    • The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils.  Total cost for investigation, removal, and disposal exceeded $320,000. 
    • A concrete recycling contractor hauled material from a jobsite that contained unknown contaminants. While transporting the material, heavy rains started, which allowed the contaminants in the material to escape from the truck. During the course of transporting the contaminants were found to have spread over a 35-mile route.  EPA fines and remediation expenses were in excess of $300,000. 
    • A concrete demolition contractor ruptured a natural gas pipe while working on a job, which created a large high-pressure release. Due to safety concerns, local authorities evacuated a 2-block radius around the accident while it was being contained, shutting all businesses down within that radius. The contractor was subject to cleanup costs and business interruption expenses in excess of $1,000,000. 

    Overlooked Benefits of Environmental Liability Insurance

    Because environmental losses are a severity risk, rather than a frequency risk, the majority of contractors lack the financial strength to self-insure their potential environmental liabilities. Since every contractor has notable environmental exposures, consideration to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insuring. 

    Three Overlooked Benefits of environmental liability insurance:

    • Defense Costs:  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 costs i.e. legal fees, environmental investigations, etc.  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  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 for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Coverages

    Contractors Pollution Liability (CPL)

    Contractors Pollution Liability (CPL) insurance protects the insured should they cause or exacerbate an environmental condition while performing their contractor services.  CPL protects the insured for covered operations performed by or on behalf of the insured, while operating away from any premises they own, rent, lease or occupy.

    CPL can be offered on a claims made or occurrence basis.  Coverage can be written on a job specific basis, or on a blanket basis to cover all the work performed by the insured.  Most policies can be endorsed to cover transportation pollution liability, mold, lead, and asbestos, defense outside the limits, off-site disposal coverage, and more. Contractors incorporating CPL coverage as part of their risk transfer strategy, drive their growth and profits by marketing the benefits CPL coverage affords in reducing job interruption due to environmental issues.  A major environmental liability exposure faced by all contactors lies in who they are doing business with.  If there is an environmental loss at a job site, innocent contractors can and do get named in lawsuits.  Do your subs/vendors have CPL insurance if they cause an environmental loss?

    Environmental Impairment Liability (EIL) 

    EIL is for contractors that own, rent, lease, operate or have any other insurable interest in real property (a fixed site facility such as a shop, batch plants, cement manufacturing/mixing plant….) that can be susceptible to pollution liabilities that actually or allegedly originated from the insured property. 

    Coverage can include: Pre-existing unknown pollution, new pollution conditions, first party on-site clean up, third party bodily injury, property damage, business interruption and extra expense, off site cleanup costs, legal defense expenses, transportation pollution liability, offsite disposal coverage….  Multi year term policies can be negotiated. 

    Incidental Professional Liability 

    Professional exposures are generally excluded from General Liability and monoline Contractors Pollution Liability policies. In the course of their normal operations, contractors face all types of professional exposures. They may make slight adjustments on the provided plans to get the job done properly, they may supervise subcontractors, or provide other recommendations which could potentially be questioned in the event of a claim. In the event of a professional claim, will your insurance provide coverage? 

    Transportation Pollution Liability

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of transported cargo. Transportation pollution liability 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 tank system.  

    Property Transfer Liability 

    When buying or selling property there 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. 

    Property transfer coverage assists to keep the property at its maximum value while allowing the insured to negotiate more favorable loan terms than property not supported by this coverage.      

  • Wastewater Treatment Plants

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose.  In other words, something that ends up where it does not belong.  Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. What pollutants are impacting your operation?

    Environmental Exposures Impacting Wastewater Treatment Plants 

    May include, but are not limited to;  Forever chemicals in waste water such as PFAS, PCBs;  Stormwater runoff after land application or from treatment plant grounds;  Discharges of contaminated effluent, (resulting from a treatment process breakdown, untreatable contaminants like pharmaceuticals, excess volume from combined sewer overflows….); contaminated effluent which causes soil, surface water and/or groundwater contamination (the effects of improperly treated effluent entering a surface water body might include, natural resource damages, fish kills, harm to human health if the surface water is used for recreational purposes or contamination of drinking water supply), pump/lift station failure; backup generator failure; nuisance odor claims; leaks, ruptures, spills from underground or above ground storage tanks; storage of raw materials such as Chlorine;  improper storage of sludge causing soil or groundwater contamination;  Backflow of contents from septic tanks, grease traps and other connected structures;  No auditing of waste handling and disposal companies;  historic site conditions; lagoon failures; sewer line ruptures;…. 

    Environmental Loss examples

    1. A chlorine release at a wastewater treatment plant resulted in toxic air emissions. Area residents and businesses were evacuated, and several people were hospitalized for inhalation of fumes. Claims against the facility for bodily injury and business interruption, combined with defense costs, exceeded $460,000. 
    2. A liquid wastewater treatment plant utilized sulfuric acid in their process and stored it on-site in a 20,000-gallon aboveground storage tank. The storage tank was contained by two-foot-high, chemically sealed masonry walls. Overnight, an area high on the wall of the storage tank ruptured, releasing the sulfuric acid. The leak squirted beyond the containment walls, releasing approximately 3,000 gallons of tank contents into the soil and into an adjacent stream. Government mandated costs for clean up of on-site soils, the stream and the stream bank exceeded $1 million.   
    3. 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 off-site to neighboring businesses. The business owners had environmental testing performed on their properties, confirming that elevated levels of contaminants existed at their properties. In addition, The EPA cited the manufacturer for various discharge violations and issued an administrative order finding the manufacturer responsible for contamination of the adjacent properties. Government mandated cleanup costs exceeded $250,000. In addition, business owners filed claims against the manufacturer for property damage, business interruption and trespass of pollutants. The combined total of the civil suits exceeded $500,000. 
    4. An industrial user of a wastewater treatment plant sent a sudden surge of contaminants, often called a slug, through the plant. The slug upset the treatment process and killed off the population of microorganisms. As a result, untreated effluent was discharged into a river – a source of both drinking water and recreation. The adjacent town discovered contamination in their municipal water supplies and were forced to close their wells. The town sued the treatment plant and settled for $780,000. A local environmental group filed a class action suit (under the Clean Water Act) in the amount of $750,000 for loss of enjoyment of the stream. Additionally, the plant had to shut down temporarily to clean treatment tanks and reestablish its capabilities. 
    5. A convention taking place at a park was disrupted and forced to relocate because of the odor from a wastewater treatment plant. A suit in the amount of $100,000 was filed against the plant for loss of enjoyment and for costs to relocate the convention. 
    6. Dalton Utilities, a municipal company that provides electricity, sewage treatment, natural gas, and drinking water for the city of Dalton, Ga., has been sentenced in Northern Georgia U.S. District Court for falsifying wastewater analysis in monthly operating reports.  Dalton was fined $1 million.
    7. The city of Ketchikan, Alaska, reached a $39,000 settlement with the EPA.  The city owns and operates a wastewater treatment facility that discharges treated wastewater into the Tongass Narrows. The wastewater treatment plant is part of a sanitary sewer system that receives domestic wastewater from residential and commercial sources. The facility serves a population of approximately 8,000.  The discharge from the city’s facility exceeded the fecal coliform bacteria, copper, biochemical oxygen demand, total suspended solids, pH and total residual chlorine effluent limits on numerous occasions. 
    8. Chlorine release at a wastewater treatment plant resulted in toxic air emissions. Area residents and businesses were evacuated, and several people were hospitalized for inhalation of fumes. A total of 12 businesses were forced to shut down for the better part of a day. Bodily injury claims amounted to $70,000 and business interruption claims totaled $120,000.
    9. A wastewater treatment plant that was 25 years old had been upgraded several times over the years. Improper closure of an old clarifier and on-site surface impoundment had allowed gradual seepage into groundwater. These constituents contaminated the underlying groundwater, which was a potable water supply for the neighboring community. The costs for groundwater cleanup and emergency water supply for residents totaled $550,000.
    10. A wastewater treatment plant maintained its own sewer lines. Due to the age of the lines, several cracks had developed over the years. These cracks had continuously leaked liquid raw sewage over many years and eventually polluted a nearby stream. Residents in the area sued the treatment plant for the cost to remediate the stream as well as loss of enjoyment of the stream.  Claims exceeded $350,000.
    11. A process tank at a wastewater treatment plant malfunctioned.  The tank discharged a large volume of untreated wastewater into a nearby stream, causing damage to aquatic life.  Several residents and environmental groups filed property damage lawsuits.

    Overlooked Benefits of Environmental Liability Insurance 

    Most wastewater treatment plants operating today, lack the financial strength to self-insure their environmental liabilities.  Consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy.

    Three Overlooked Benefits of environmental liability insurance

    1. Defense Costs:  Environmental liabilities are relatively new and very litigious.  Even if you do nothing wrong you can still get named in a suit and must expense defense costs i.e. legal fees, environmental investigations 
    2. Claim Management:  All policies come with specialists to assist you in handling a claim.  Who oversees communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    3. Third Party Liability:  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 for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor create an environmental loss.

    Environmental Liability Insurance Coverages

    Risk transfer products for wastewater treatment plants:

    ENVIRONMENTAL IMPAIRMENT LIABILITY (EIL) 

    EIL is for wastewater treatment plants 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 first party on-site cleanup, third party bodily injury and property damage along with business interruption and extra expense, off site cleanup costs, legal defense expenses, non-owned disposal sites, transportation and more.  EIL can be offered on multi year terms.  Sewer lines and pump/lift stations can be covered by EIL.  Most EIL policies cover above ground storage tanks.  Strong consideration should be given to first party business income and extra expense.

    CONTRACTORS POLLUTION LIABILITY 

    This coverage can be purchased to meet two specific exposures. First, contractors that perform environmental remedial / service activities (day to day plant operations, asbestos, lead, mold, soil or ground water remediation, emergency response) or land application at non-owned or leased property.  There is the standard Contractors Pollution Liability (CPL) insurance coverage for the non-environmental construction services necessary for the operation and proper maintenance of wastewater operations.  CPL protects the insured for pollution conditions they may cause or exacerbation of an existing situation while performing their covered construction services.  The loss must occur away from any premises the insured owns, rents, leases or occupies, in other words while they are performing contracting services in the field.

    TRANSPORTATION POLLUTION LIABILITY

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of their cargo. Transportation pollution liability 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 can 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 Coverages:

    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.  If you use a vendor for land applications, either EIL or contractor’s pollution liability, depending upon the insurable interest where the land application is taking place.

     

  • Environmental Strategist, between the lines:

    Do you work with food service business?  Businesses in the food service industry use a variety of equipment to prepare the food and beverages they offer their clientele.

    I am often asked if food service businesses have any environmental exposures and the first thing that comes to my mind is poisoning customers.  The food service industry is under very tight regulations that require a variety of cleaning and disinfectant chemicals / compounds.

    I can’t tell you how many hundreds of times I have heard of poisoning claims in the food service industry.

    When talking with someone in the food service industry about their environmental exposures from cleaning and disinfecting equipment and facilities, the usual response back is, “We only work with environmentally friendly cleaning and disinfectant chemicals / compounds.”  Great, but what happens when one environmentally friendly cleaning compound is accidentally mixed with another environmentally friendly cleaning compound?  It can create a pollution liability including third party bodily injury, property damage, business income, cleanup costs, defense costs….

    https://www.advisen.com/tools/fpnproc/news_detail3.php?list_id=26&email=chris@ermi.us&tpl=news_detail3.tpl&dp=P&ad_scale=1&rid=426592354&adp=P&hkg=i4l0f4B9AY

  • environmental Management Strategy, “Who are you doing business with?”

    For a Certified environmental Strategist (CeS), the first step in developing and executing an environmental Management Strategy (eMS) is to find out, “Who you are doing business with?”

    A business may do nothing wrong at all, but if a vendor/s the business hires causes for there to be an environmental liability, the business can still be held responsible.

    A few years ago, Walmart and Home Depot each paid multi-million-dollar fines to the EPA for storm water runoff from their construction sites caused by contractors they hired.  Today, Walmart and Home Depot require contractors doing work for them to evidence environmental financial assurance by having Contractors Pollution liability (CPL) insurance in place in order to perform their services.

    Even if you have an “environmental indemnification” in your contracts, without environmental financial assurance in place to back stop potential environmental liabilities, the contract may not be worth the paper it’s written on.

    The links below will give you examples of businesses that have experienced environmental liabilities caused by vendors they hired.  These are reminders why step #1 in developing an eMS if to find out, “Who you are doing business with?”

  • Environmental Exposures and Financial Assurance for the Cement / Masonry Industry

    environmental Strategist, between the lines:  Every business is impacted by environmental exposures and a Certified environmental Strategist (CeS) understands in today’s business environment, it’s imperative that businesses have an environmental financial assurance strategy to back stop potential environmental liabilities.  There are a variety of environmental financial assurance instruments available, i.e. bonds, insurance, captives (EnviroCap), letter of credit, self-insurance….

    Simply due to the product they are dealing with the cement / masonry industry from manufacture (emulsifiers, silica, carbon dioxide and other air emissions), to use and disposal is not an environmentally friendly industry.

    The EPA states “the cement sector is the third largest industrial source of pollution emitting more than 500,000 tons per year of sulfur dioxide, nitrogen oxide and carbon monoxide.”

    Cement kilns used in the manufacturing of cement need to be heated.  The main source for heating is coal.  Due to the high cost of operating the cement kilns at high temperatures some cement kilns will burn hazardous waste as a supplemental fuel.  Cement kilns that burn hazardous waste (i.e. solvents; waste oil; sludge from petroleum refining, paints and coatings; waste oil…) must comply with both RCRA (Resource Conservation & Recovery Act) and CAA (Clean Air Act).  Bottom line, cement kilns that burn hazardous waste are being monitored by the Government and further supports the need for an environmental financial assurance strategy.

    During manufacturing, construction, demolition, natural disasters…, cement dust is generated which is a hazardous air pollutant.

    An article from The Economic Times points out, “cement produces more pollution than all the trucks in the world.”  https://economictimes.indiatimes.com/news/international/world-news/cement-produces-more-pollution-than-all-the-trucks-in-the-world/articleshow/69919005.cms

    I could continue highlighting environmental exposures impacting the cement / masonry industry but simply due to the materials and processes used, they are great candidates for pollution insurance to meet their environmental financial assurance strategy.

    The links below offer additional information on cement businesses negatively impacting our environment and human health.

    https://indianapublicmedia.org/news/indiana-cement-plant-faces-730k-in-fines-for-air-pollution.php

    https://www.epa.gov/newsreleases/epa-fines-mason-city-iowa-cement-manufacturer-alleged-clean-air-act-violations

    https://ag.ny.gov/press-release/2021/attorney-general-james-holds-albany-area-cement-plant-accountable-years-water

    https://www.wamc.org/capital-region-news/2021-04-30/federal-government-nys-reach-settlement-with-cement-plant

    https://www.aggregateresearch.com/news/national-cement-fined-148000-over-mercury-emission-violations/

    https://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-announces-75-million-settlement-lehigh-cement

    You can also go to the EPA Cement Manufacturing Enforcement Initiative  https://www.epa.gov/enforcement/cement-manufacturing-enforcement-initiative for more on the cement industry and additional cement plant settlements.