Question:
Hello Chris,
Hope all is well sir. Just wanted to see if you have any information you can share. I have a client who owns some five and ten cent stores and I wanted to know what pollution exposures exist along with any case studies I can share with my client.
Thank you.
environmental Strategist™ (eS) Response,
Well, I could carry on and on about the environmental exposures for a five and ten cent store but let me focus on just a few items for this insured that owns one building and rents 8 other locations.
- Their inventory. Plastic for the most part is petroleum based, should it catch on fire it gives off toxic fumes. If they are buying fire insurance, what is their strategy once the fire occurs and they are being sued for third party BI and PD from the toxic properties of their inventory? The insured has several other products in their inventory that should they catch on fire will create an environmental liability.
- Tenant exposure. As a tenant in 8 locations they have signed a lease agreement that I am confident contained an environmental indemnification. What is their strategy to pay for defense costs, clean up costs, third party BI, PD, business income…. Should they cause an environmental liability?
- Who are their neighbors? Neighbors can cause contamination to come onto the insureds property and what if the neighbor does not have the financial where with all to pay for the cleanup, defense costs, third party BI, PD, Business income….? Under federal law the owner of the property is ultimately responsible for the environmental condition of their property. In this case the insured has one location they own and 8 locations they lease. In the united State we have in excess of 450,000 known leaking underground storage tanks that most are causing contamination on neighboring properties. In Michigan alone we have in excess of 9,000 known leaking underground tanks.
- I am sure on occasion the insured will hire contractors such as HVAC, Plumbing, Electrical, Janitorial…. what if one of these contractors causes an environmental liability while working for your insured? What is their strategy?
- Due to the vast array of environmental exposures impacting this class of business the environmental insurance industry has created several products that can add value to this insureds business model. Please refer to our environmental Risk Assessment (eRA) for Real Estate Developers and Owners or the QR Codes.
The eRA allows you and your client/s to get on the same page about the environmental exposures impacting their operations. I am sending the eRA to you in a Word format so you can cut and paste it into a marketing presentation that compliments your agencies marketing program. Our agents utilizing the eRA find it an excellent way to leverage their environmental liability insurance sales.
The eRA comes in three parts:
1. Review of specific environmental exposure impacting your insured.
2. Environmental loss examples
3. Environmental insurance coverage’s that are appropriate for the insured to consider.