environmental Strategist, between the lines:  In the past eS has sent out Competitive environmental Intelligence (CeI) on PFAS / PFOA… chemicals and how they are so ingrained in the fabric of our society.  PFAS / PFOA… are going to make asbestos and lead look like elementary environmental issues.  Their negative impact on our environment and human health cannot be understated.  No matter where you live, you and your family are exposed to PFAS chemicals daily.

As a refresher, PFAS chemicals are used for their resistance to heat, water, oil and grease.  PFAS are a group of human-made chemicals (more than 4,000) that includes PFOA, PFOS, GenX, and many other chemicals. PFAS have been manufactured and used in a variety of industries around the globe, including in the United States since the 1940s and contaminate soil, ground water, surface water and the air.  PFAS can resist degradation in the environment and bio-accumulate; meaning that they are persistent in the environment and tend to concentrate in blood and organs over time in biological species.  People can be exposed to these chemicals in house dust, indoor and outdoor air, food, and drinking water. Exposure to certain PFAS chemicals has ties to cancer, ulcerative colitis in adults and thyroid disease in children, among other health problems.

PFAS chemicals can be found in:

• Food, packaged in PFAS-containing materials, processed with equipment that used PFAS, or grown in PFAS-contaminated soil or water.
• Commercial / household products, including stain- and water-repellent fabrics, carpets, upholstery, soap, shampoo, clothing, leather, nonstick products (e.g., Teflon), pizza boxes, fast food wrappers, microwave popcorn bags, polishes, waxes, cleaning supplies, paints, textiles, paper & packaging materials, cleaning products, and fire-fighting foams (a major source of groundwater contamination at airports and military bases where firefighting training occurs).
• Workplace, including production facilities or industries (e.g., chrome plating, electronics manufacturing or oil recovery) that use PFAS.
• Drinking water, typically localized and associated with a specific facility (e.g., manufacturer, landfill, wastewater treatment plant, firefighter training facility).
• Living organisms, including fish, animals and humans, where PFAS can build up and persist over time.

In this CeI I am highlighting a few articles that show some of the negative impacts we are beginning to learn about the PFAS family of chemicals.

MDHHS recommends Michiganders avoid foam on lakes and rivers:  This warning was issued by the Michigan Department of Health & Human Services warning people to avoid white foam on lakes and rivers because it’s a sign of PFAS contamination.

Michiganders Avoid foam on lakes and rivers:  https://www.michigan.gov/mdhhs/0,5885,7-339–560802–,00.html?utm_campaign=dhhs+pfas+foam+lakes+rivers+pr&utm_medium=mkt+email&utm_source=govdelivery

It’s Literally raining PFAS around the Great Lakes:  You may not be old enough to remember when the world was combating the effects of Acid Rain, this article points out we now have PFAS rain.

It’s Literally raining PFAS around the Great Lakes:  https://www.mlive.com/public-interest/2021/06/its-literally-raining-pfas-around-the-great-lakes-say-researchers.html

Half of Cosmetics contain PFAS Chemicals:  A major percentage of cosmetics contain PFAS chemicals and people are applying them to their body.  California and Maryland to just name a few States have passed laws to ban certain chemicals in cosmetics.  The bans will not go into effect for a couple of years but obviously they are reacting to a problem they have identified with PFAS.

Half of Cosmetics contain PFAS Chemicals:  https://www.insurancejournal.com/news/national/2021/06/17/618956.htm

Vermont Law restricts sales of products containing PFAS:  Vermont has passed a law to phase out PFAS chemicals in products to better protect Vermonters health and their environment.

Vermont Law restricts sales of products containing PFAS:  https://www.insurancejournal.com/news/east/2021/05/24/615503.htm

When discussing pollution insurance to business owners, most often, the first thing that comes to their mind is first party clean up coverage for a spill.  While that is a coverage benefit, there are many benefits offered in a pollution policy besides just clean up.

As you read, keep in mind, environmental liabilities tend to be a severity versus frequency issue.

For decades, ERMI has pointed out three benefits often overlooked in pollution policies:

1. Defense Costs
2. Environmental claims specialists to assist in handling a claim
3. Third Party Liabilities, i.e., Bodily Injury, Property Damage, Business income…

As the environmental insurance industry continues to mature, it has been able to broaden coverage offerings in their base policy forms that were once induvial endorsements, i.e., Non-Owned Disposal Sites, Mold, Transportation Pollution Liability….

A couple of additional benefits that carriers have been adding to their base policy forms are Reputational Risk Coverage & Emergency Response Costs.  Generally, each coverage will have their own set of limits.  Once Reputational Risk Coverage & Emergency Response Costs limits are exhausted, the primary policy limits step up.

Reputational Risk (Image Restoration) Coverage:  Environmental Insurance carriers have seen firsthand the damage to businesses that did not have an environmental financial assurance plan to proactively address their Reputational Risk after an environmental loss.  Reputational Risk Coverage assists an insured to proactively protect their reputation, prevent adverse events, limit damage, while rebuilding their reputation / brand and consumer confidence after a covered cause of loss.  Insurance carriers become an insureds reputational risk partner in mitigating the profitability risk associated with an environmental reputational crisis.

The strategy here is like Coverage C:  Medical Payments on a Commercial General Liability policy which basically is designed to cover third party BI as a goodwill coverage providing a level of reputational protection to the insured.

Environmental Emergency Response Costs:  Cover expenses incurred with remediation because of pollution conditions that require immediate action.  The intent of the coverage is to minimize the insureds liability and / or impact on the environment.

The Emergency Response Costs strategy is to get remediation professionals responding to an environmental liability when it occurs, instead of having to go through the normal insurance claim reporting process to qualify for coverage.  Insurance carriers understand the faster remediation professionals respond, the better chance there is to reduce the size and amount of environmental liabilities.

When an insured is questioning investing in pollution insurance, make sure they understand the importance these coverage benefits offer as part of the premium and their environmental risk transfer strategy.

In today’s business environment, insureds need to understand why insurance carriers are offering these coverage benefits.  For insured’s that elect to self-insure their environmental liabilities, they still need to have an environmental financial assurance plan in place or risk going out of business when they experience an environmental liability.

Attached is an article I did in 2008 for The National Alliance, it points out how to assist your insureds in identifying and reducing their exposure to environmental liabilities by developing an Environmental Management Strategy (EMS).  It is still very relevant today.

environmental Strategist, between the lines:  After more than three decades concentrating in environmental risk management / insurance, I am still amazed how many businesses do not understand the vast array of environmental exposures impacting their business model.

An emerging pollutant businesses need to be familiar with are PFAS chemicals.  There are over 4,000 PFAS chemicals and they are a “forever chemical”.  If you are not familiar with PFAS chemicals, you need to be so let me know and I will send you some information.  As an example of why PFAS is the next asbestos, to date, the State of Michigan has identified fewer than 200 PFAS contaminated sites in the State and experts believe that number is going to grow to 11,000 just in Michigan.

As the link below points out Johnson Controls is paying residents of the Town of Peshtigo, Wi. $17.5m for PFAS contamination of drinking water wells from the company’s firefighting foam training site.  The settlement covers a contamination plume of about three-square miles.

Environmental coaching strategy:  Working with a commercial insured, should they give you the old “we don’t have any environmental exposures in our business”.  The question to ask next is, who are your neighbors and what if a neighbor causes for contamination to come onto your property?  Pollution insurance policies can protect insureds if third parties contaminate their property.

I have found an effective way to get this point across is have the business pull up Google maps on their computer and type in their address.  Now have them scan out to a 2-mile radius (in a Phase I site assessment they do a minimum of a 2-mile radius search to see who neighbors are) from the subject property and ask them how comfortable they are that no one in the 2 mile radius could cause for contamination to come onto their property.  Oh, you are not comfortable, that would be a good reason to consider investing in pollution insurance.

https://wisconsinexaminer.com/brief/johnson-controls-to-pay-17-5m-to-town-of-peshtigo-residents-in-pfas-class-action-suit/

Natural Disaster Losses Jump 25% in 2020
•2020 Represent the fifth costliest year for covered insurance losses since 1970.
•Swiss Re cautioned that climate change was expected to exacerbate Natural Disasters
ERMI continues to coach how Natural Disaster Seasons (NDS, i.e. Flooding, Tornados, Forest Fires, Hurricanes, earthquakes…) are a great time to talk pollution. Most pollution policies do not exclude Acts of God (i.e., Natural Disasters).
During NDS, national and local media are lighting up the airways / internet highway with all the pollution problems caused by natural disasters.
Note: Pollution losses tend to be a severity versus frequency issue.
Note: Under Federal law, property owners are ultimately responsible for the environmental condition of their property regardless of who or what caused the contamination.
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. Who’s responsible?
As your team member for all things environmental, let ERMI know how we can assist you to drive your sales during NDS.
https://www.barrons.com/news/disaster-linked-losses-in-2020-hit-187-bn-swiss-re-01608031808?tesla=y

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.

https://www.bakersfield.com/ap/national/firefighters-continue-to-battle-massive-industrial-blaze-in-texas-that-may-burn-for-days/article_e4931b17-e7d5-58c7-8be1-de10b1dd1001.html

COVID has drastically raised the number of virtual Environmental Play Book reviews we conduct with our retail agency partners.  Our partners are realizing the valuable electronic resource the Play Book is and how simple to customize their ERMI Play Book to meet their business model.

The ERMI Play Book is loaded with resources to assist you in growing not only your environmental insurance sales, but sales of all the insurance products your agency offers.  From commercial and personal lines P&C to life and health, the ERMI Environmental Play Book resources are proven to drive insurance sales.

New producers to the insurance industry should be laser focused on environmental.  Why?  Because fewer than 15% of licensed insurance professionals are actively working with pollution liability insurance, yet every insured you work with is impacted by environmental exposures.

ERMI Play Book Sales Strategy #1:  Prospect for new business, 90 days after renewal.  We all know what’s going on 90 days before renewal.  90 days after renewal, the smoke has settled and when you call a prospect and say you would like to discuss the environmental exposures impacting their business, their first response is, “We are not impacted by environmental exposures.” What!!!

The ERMI Play Book contains a resource to address this response, the ERMI environmental Risk Assessments (eRA).  Our partner agencies find utilizing the eRA’s is an excellent way to leverage their insurance sales through educating the client about the fiscal realities of pollution protection.  For those in the know, it genuinely does have a measurable impact to their bottom line and strategic financial planning.

So, you email the appropriate eRA (see list below) to the prospect that is “not impacted by environmental exposures” and follow up with a phone call in a week.  The prospect responds, after reading the eRA, they now realize there are several environmental issues impacting their operations.  They go on to say they would like to further discuss how investing in pollution liability insurance will add value to their business model.

You meet with the insured and through the course of the meeting, they ask you if you would take over their whole insurance program because you brought more value to the table than their current agent.

Environmental Risk Assessments (eRA)

Environmental Risk Managers (ERMI) success in the environmental insurance niche has been the integration of environmental education and risk management.  An environmentally educated insured can make an informed decision if investing in pollution insurance will add value to their business model.

One such educational resource we developed are environmental Risk Assessments (eRA).

We send our eRA’s in a Word format, so you can cut and paste them into a marketing presentation that compliments your agencies marketing program.

The eRA’s come in three parts:

1. Review of environmental exposure impacting your insured.
2. Environmental loss examples
3. Environmental insurance coverage’s that are appropriate for the insured to consider.

The goal is to educate your insured, so they can make the best decisions for their business. If your insured sees value and elects to further pursue environmental insurance coverage, we’re here to make your job easier by utilizing our network and expertise to market your client’s submission and supply you with the best environmental insurance coverage options.

Below is a list of the eRA’s we have developed.  Call or email me on which eRA’s you would like to add to your ERMI Environmental Play Book.  Don’t have your ERMI Play Book, let me know and we will get you a copy.

List of eRA’s:

Agriculture:  •Botanical Gardens  •Commercial Farming  •Dairy Cattle  •Fruit Farmers  •Livestock Operations  •Vineyards

Auto & Marine:  •Auto Servicing & Repair  •Auto Dealers / Service Garages  •Auto Salvage Yards  •Convenience Stores / Gas Stations  •Marinas / Ship Yards  •Marinas  •Ports  •Tire Sales & Service

Aviation:  •Aviation Industry

Contractors:  •Aggregate Crushing & Project Waste Management  • Asphalt Paving  •Commercial •Commercial Janitorial Contractors  •Concrete / Masonry  •Concrete Additive •Contractors Operations Facilities  •Contractors Pollution & Professional  •Demolition  •Directional Drilling  •Drilling  •Drywall  •Electrical  •Environmental  •Excavation  •Fire Suppression  •Flooring  •Glass  •Highway Construction  •HVAC  •Landscapers  •Logging  •Painting  •Plumbing  •Pressure Cleaning  •Remediation  •Residential  •Roofing  •Septic Service Providers  •Sewer Cleaning  •UST / AST Contractors

Disposal / Recycling:  •Plastic Recyclers  •Scrap Metal

Financial Institution:  •Financial Institutions

Food & Beverage:  •Beverage Distributors  •Dairy Distributors  •Distilleries  •Food Distributors  •Food Processors  •Restaurants

Hospitality:  •Golf & Ski Resorts  •Golf Courses  •Hotels & Resorts  •Hunting & Fishing Clubs  •Ski Resorts

Manufacturing:  •Manufacturers  •Pallet Manufacturers / Distributors  •Plastic Manufacturers  •Sheet Metal Fabrication  •Tool & Die Shops

Medical Facilities:  •Hospitals  •Medical Offices  •Pharmaceutical Companies  •Senior Living Facilities

Mining & Cement:  •Concrete Suppliers  •Quarries

Public Entities:  •Municipalities  •Waste Water Treatment Plants

Real Estate:  •Real estate Owners & Developers  •Pollution Insurance Manual for Condo and Apartment Owners

Trucking:  •Trucking Companies

The link below will take you to an article published by the IIABA where I strategize on the growth in the environmental insurance industry has created a problem for insurance carriers being able to hire knowledgeable and experienced underwriters.  And that is causing a problem for retail agents that work directly with carriers.

ERMI has witnessed plenty of cases where retail insurance agents working directly with inexperienced underwriters, are not negotiating proper coverage and endorsements.  This means an increased E&O exposure for the retail agent.

The growth in the environmental insurance industry has placed greater emphasis on making sure insurance agents are working with knowledgeable and experienced specialty wholesalers like ERMI.  By teaming up with ERMI you are assured the broadest marketing efforts, allowing you to deliver the best coverage at a competitive premium.

Other issues ERMI has witnessed when insurance agents work directly with carriers.

1. This has happened with various carriers over the years, but for example, a few years ago, AIG decided to re-evaluate their environmental book of business which meant they were non-renewing a substantial amount of policies.  This left many agents with no alternative markets, which meant ERMI saw a nice increase in new business submissions.  In remarketing the AIG renewals with alternative carriers, ERMI was beating expiring AIG premiums by an average of 35% and adding coverage enhancements.
2. As insurance carriers enter and exit the marketplace, a specialty wholesaler will have relationships with a variety of environmental insurance carriers so they can effortlessly move insureds and make sure they are with the appropriate carrier/s.
3. As the market begins to harden, what ERMI experienced in the last hard market cycle were carriers either exiting the market or restricting coverages.  A wholesaler will be able to search markets to make sure you are with the proper carrier at a competitive premium for the market conditions.
4. If you are not working in the environmental space daily, as emerging contaminants (PFAS, Surfactants, Glyphosate, Silica, Legionella…) continue to surface, an environmental wholesaler will coach you on assisting your impacted insureds.  See attached ERMI Environmental Play Book.

https://www.iamagazine.com/markets/read/2020/01/27/why-experience-is-crucial-in-environmental-liability-insurance

Last year we shared competitive environmental intelligence on a crematory contaminated with radiation from cremating human remains of cancer patients (https://www.kctv5.com/news/cancer-patient-s-treatment-leaves-radiation-contamination-in-arizona-crematory/article_23c6ee93-9fdd-54ed-a6c7-a334c0aec863.html).  The link below explores the exposure of radiological / nuclear contamination and failure of septic systems used by cancer patients.

The link below examines what coverage would protect property owners, businesses, neighbors from radiological and nuclear contamination caused by cancer patients?  Coverage would be excluded under Standard P&C policies so a pollution policy can protect not only the cancer patients and businesses that serve them but all those in the radiological / nuclear supply chain i.e. production, shipment, storage, implementing medical procedures, caring / serving cancer patients…., tens of thousands of businesses are involved.

In the United States in 2006 (most recent year for data) about 377 million diagnostic and interventional radiological examinations and 18 million nuclear medicine examinations were performed, and that number has grown exponentially since 2006 due to all the new radiological and nuclear medicines.

Work with your insureds that have exposure to radiological / nuclear contamination and put into place an environmental financial assurance plan to protect their business.  Keep in mind pollution liabilities tend to be a severity versus frequency issue.

https://www.propertycasualty360.com/2019/11/13/chemo-drugs-and-septic-tanks-pollution-or-covered-loss/?kw=Chemo%20drugs%20and%20septic%20tanks:%20Pollution%20or%20covered%20loss?&utm_source=email&utm_medium=enl&utm_campaign=dailynews&utm_content=20191113&utm_term=pc360&enlcmp=nltrplt2

environmental Strategist, between the lines:  As the article below points out there has been an eight-fold increase in the number of Legionnaires cases over the last two decades.  The hotbeds for Legionnaires are hot tubs, hotels, hospitals.  The “experts” point to several factors for the explosion of cases in the US, i.e. decaying infrastructure, an aging population, green buildings, water conservation efforts, climate change and increased testing.

Legionnaires Disease is a bacteria that can create an environmental liability for those using central air conditioning systems, fountains, room-air humidifiers, ice-making machines,  whirlpool spas, water heating tanks & systems, showers, swimming pools, misting systems typically found in grocery-store produce sections, cooling towers used in industrial cooling systems, evaporative coolers, nebulizers, humidifiers, windshield washers, physical therapy equipment….

The article discusses that dealing with Legionnaires can be very expensive and it’s anticipated the number of Legionnaires cases will continue to grow.

Besides property owners experiencing expensive cleanups, business interruption, third party bodily injury, third party property damage, reputational damage…, who else gets named in Legionnaire lawsuits?  Vendors who can impact water such as plumbers, HVAC contractors, Refrigeration contractors….

As your client’s professional risk manager, you need to make sure clients have an environmental financial assurance plan to address their exposure to Legionnaires.

Pollution insurance can protect your insureds from Legionnaires liabilities.   

https://www.chicagotribune.com/lifestyles/health/sc-hlth-legionnaires-1113-20191108-fkgvdm2nnratfe2uuxavmsasqe-story.html

We have strategized how Legionnaires occurrences experienced a five fold increase from 2000 to 2017.  Sometimes it can be tricky for me to understand what this means.  I was reading the web links below that offer articles related to recent Legionnaires occurrences, pay attention to the dates.

Headlines:

10-21-19:  DC Psychiatric Hospital Goes Weeks Without Drinking Water

10-18-19: 4^th Legionnaires Disease Death Reported In North Carolina From Hot Tub Display

10-10-19:  Michigan Probes Detroit Area Hospitals 7 Legionnaires Cases

10-4-19:  NW Indiana Schools Closed After Legionnaires Discovery

9-15-19:  2 New Cases of Legionnaires in Suburban Chicago

8-18-19: Officials Probe Respiratory Illness At Quincy Veterans Home

8-15-19:  Source Confirmed In Legionnaires Outbreak At Atlanta Hotel

8-14-19:  Maine CDC:  Legionella Bacteria Eliminated From Water Source

8-1-19:  Hotel In Schaumburg, Illinois

8-1-19:  Hotel In Tomahawk Wisconsin

7-15-19:  Three Employees in La Porte County Indiana

7-1-19:  Nursing Home in Connecticut

Question:  How many Legionnaires cases were not reported or known about?

Who has exposure to Legionella?  Legionnaires Disease is a bacteria that can create an environmental liability for those using central air conditioning systems, fountains, room-air humidifiers, ice-making machines,  whirlpool spas, water heating tanks & systems, showers, swimming pools, misting systems typically found in grocery-store produce sections, cooling towers used in industrial cooling systems, evaporative coolers, nebulizers, humidifiers, windshield washers, physical therapy equipment….

Question:  Should you be strategizing on managing and transferring Legionnaires exposures with your insured’s?  Environmental Risk Managers is here to team up and assist.

Links to Legionnaires articles:

https://www.apnews.com/Legionnairesdisease

https://hcinfo.com/about/outbreaks/recent/