Tag: Contractors

  • Concrete & Masonry 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 Concrete & Masonry Contractors 

    Include, but are not limited to: Storm water runoff;  Mold;  Transportation of raw materials;  Silica;  Asbestos; Natural resource damages;  Storage of raw materials;  Illegal disposal of waste by 3rd parties at jobsites (midnight dumping);  Release of oils/fuels from equipment;  Spills from mobile storage tanks;  Exacerbating preexisting contaminated material;  Puncturing underground utilities or storage tanks;  Ground water contamination. 

    Environmental Claim Scenarios

    1. While transporting material to a job site, a concrete contractor got into an accident which caused most for the material to enter a nearby stream. Remediation costs, and natural resource damage claims totaled over $250,000.     
    2. During the construction of a parking garage below a structure, silica dust migrated up an elevator shaft and disbursed throughout all floors of the building.  It was determined that inadequate dust barriers were what allowed the silica to infiltrate the shaft. The liable concrete contractor filed a claim with their GL carrier for the resulting property damage and bodily injury, but its insurer denied the claim, due to the policy’s pollution exclusion. The contractor was ultimately responsible for coving 100% of the loss. 
    3. While setting up concrete forms at a commercial property, a concrete contractor accidentally drove a rebar stake through an unmarked underground fuel line. The leak was not detected until later in the day, allowing hundreds of gallons of fuel to flow into the soil. The contractor filed a claim that his insurance denied due to the pollution exclusion. 
    4. While performing construction, a cement truck started leaking hazardous materials on the roadway and into a nearby grassy recreational area.  Before the affected area was cleaned, it started to rain heavily.  An emergency contractor was called in to prevent the spread of materials and implemented a cleanup of the affected areas.
    5. A concrete contractor unknowingly spread petroleum-contaminated soil across a project site during fill operations at a project site. 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. 
    6. A masonry contractor, performing a renovation project at a historic building, was sued by employees of a nearby office building who asserted that they were exposed to silica dust coming from the job site. The claimants reported damages for bodily injury, declaring that required measures were not taken to prevent or minimize dust emission during the project.
    7. A concrete contractor laid an undercoat of slag while working at a commercial property. After the runway was completed, it was discovered that the slag was contaminated and was leaching pollutants into a tributary of one of the Great Lakes. The claim exceeded $400,000. 
    8. During construction activities, a crane that was used to lift concrete barriers overturned. The accident ruptured the crane’s hydraulic hoses, spilling all its fluid onto the ground. The contractor was required to pay clean-up costs from the spill.

    Overlooked Benefits of Environmental Liability Insurance 

    Unlike most liability exposures impacting Concrete & Masonry Contractors, pollution losses are not a frequency risk, but rather a severity risk. Because all Concrete & Masonry Contractors 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. 

    • 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.  

    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.     

    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.    

    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? 

  • Painting 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 Painting Contractors 

    May include, but are not limited to: Renovation, Repair and Painting (RRP) Federal Law of 2010;  Disturbing / impacting / exacerbating asbestos, lead, mold;  PFOA’s;  Overspray of paints and other pollutants used;  Spill of materials used during transit;  Spill of materials while at a job site;  Spills from mobile storage tanks; Sick building syndrome created from drying of paint / off-gas;  Lead abatement services;  Storm water runoff;  Ground water contamination; Underground utilities;  No auditing of waste handling and disposal companies; Natural resource damages;  Vapor intrusion;  Waste waters generated from cleaning equipment;  Release of oils/fuels from equipment;  Vandalism; Spills during loading, unloading and transportation of paint;  Warehousing raw materials and finished paint;  Toxic Release Inventory (TRI) chemicals; Products pollution;  Damaging fuel tanks, hydraulic fluid lines, boilers, utilities, etc. while power washing at a customer’s location;  Faulty hose hook-up and/or pump failures;  Accidentally using contaminated water while prepping;  Odor drifting;  Containment system failures;  3rd party nuisance claims;  and more…

    Painting Claim Scenarios

    1. While painting the interior of a nursing home, the contractor was sued by over a dozen residents alleging that they were overcome by fumes as a result of inadequate venting. Total claim was over $200,000.
    2. While working at a jobsite, a painting contractor accidentally punctured a small water pipe which was located behind the wall. The contractor did not notice the water leak, which lead to a substantial amount of mold grew between the walls. The contractor was held responsible for clean-up of the mold as well as third party bodily injury claims, which totaled over $150,000. 
    3. A child who lived in an apartment building constructed in the 1970s was diagnosed with lead poisoning. The renovation of the building by a painting contractor allegedly caused unsafe conditions for the child, and the child’s parents filed a bodily injury claim against the painting contractor. As part of the claim investigation, an expert was hired and other potential causes for the lead poisoning were discovered. As a result, the painting contractor wasn’t held liable. However, the contractor still accumulated over $50,000 in legal fees fighting the claim. 
    4. After applying a coat of paint to a new commercial structure, a sudden rainstorm that wasn’t forecasted washed paint from the exterior of the building into the surrounding ground. Cost to remediate the paint from the soil was roughly $40,000. 
    5. A painting contractor stored drums of spent solvents at a jobsite.  While employees were moving the drums, the fork lift operator accidentally knocked the drums over.  Before the spill was contained, solvent ran across the property and onto neighboring properties and into a small creek.  Claims for cleanup costs, third party bodily injury and property damage, legal fees, natural resource damages along with third party business interruption costs exceeded $500,000.
    6.  A painting contractor was hired to perform work at a property that had just been restored from flooding / file. Several months after the job had been completed, mold was discovered between the walls where the painting contractor had worked, and a suit was filed.  After further investigation, it was found that the mold was due to a failure made by the restoration contractor. The painting contractor was removed from the suit. However, they had already expensed over $25,000 in legal defense fighting the claim. 
    7. A painting contractor hired a waste hauler to transport its left-over paints and solvents to a 3rd party disposal site. 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 painting contractor had to pay their apportionment of the remediation costs, which totaled $300,000.     

    Pressure washing Claim Scenarios

    1. A painting contractor was sued when mold was discovered at a commercial building a year after they had completed a painting job. While cleaning the area with high pressure hoses, the painter unknowingly punctured a water line. Lover time the water built up insured the building walls, which caused mold to develop. The contractor was responsible for remediation, 3rd party bodily injury and property damage, as well as 3rd party business interruption, as the customer had to suspend operations while the mold was being remediated. Total cost of the claim exceeded $600,000. 
    2. A contractor used high pressure cleaning equipment to clean insured an industrial building prior to painting. It was later found that the HVAC system was home to a dangerous fungus, which spread throughout the building during the cleaning. A number of employees in the building became infected with the fungus. Some of which were critically infected. The contractor was found liable for the spread of the fungus and faced bodily injury and property damage claims in excess of $1 million.
    3. While cleaning a commercial production area prior to painting, the contractor unknowingly sprayed areas coated with lead based paint. Lucky for the contractor, the exacerbation of the lead based paint was discovered shortly thereafter, preventing any claims for 3rd party bodily injury. The total cost to survey and remediate the lead paint was $50,000.  
    4. 6-months after completing a job, the customer discovered mold in their building. The customer sued the painting contractor for the cost of remediation. After further investigation, it was determined that the painting contractor was not responsible for the mold, and was removed from the suit. However, they had already expensed over $20,000 in legal fees. 

    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. 

    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.    

    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? 

     

  • Commercial 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 Commercial Contractors 

    Include, but are not limited to: release of oils/fuels from equipment as a result of vandalism; spills from mobile storage tanks; Leaks from elevator hydraulic fluid storage tanks;  excavating through and spreading of unknown preexisting contaminated soil; storm water runoff; lead; asbestos; ground water contamination; underground utilities; puncturing unknown underground storage tanks, barrels or other illegally disposed pollutants; silica; over spray of fertilizers, herbicides; no auditing of waste handling and disposal companies; air emissions from batch plants; mold; unknowingly using contaminated soil as fill; natural resource damages; vapor intrusion; waste waters and chemicals generated from cleaning equipment;  Vapor intrusion….

    Environmental Loss Examples

    • An excavation/grading 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. 
    • A utility contractor had to pay cleanup costs and business interruption expenses in excess of $500,000 when they ruptured and unmarked petroleum pipeline.
    • During window installation, a commercial contractor failed to properly seal one of the exterior windows on a mixed-use commercial/residential building. The contractor did not notice the faulty seal, and a substantial amount of mold grew between the walls before anyone noticed. The contractor was held liable for the clean-up of the mold, defense of 3rd party bodily injury, as well as 3rd party business interruption expenses. Total cost of the loss exceeded $1,000,000.
    • A subcontractor working for a street/road contractor performed sandblasting on a bridge.  The bridge was located near a residential area.  Lead containing paint chips and dust from the sandblasting became airborne and migrated onto residential properties requiring cleanup.  The residents filed property damage claims against the contractor for the dust generated by the subcontractor.  Claims totaled $400,000.
    • A general construction company was sued when mold was discovered in a commercial building constructed by the contractor and its subs.  The general contractor was ordered by a court of law to pay mold remediation costs in excess of $600,000 and the contractor had legal fees of $250,000.   
    • 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, which exceeded $200,000.  
    • An industrial contractor dropped a piece of heavy equipment from a crane onto a pipe leading to a hydrofluoric acid tank. Acid was emitted creating a vast vapor cloud.  Approximately 3,000 residents were evacuated and 1,000 were treated for respiratory injuries.   The court entered judgment holding the contractor responsible for bodily injury, business interruption, property damage and remediation costs in excess of $10,000,000.  
    • A contractor was reconditioning a tile floor in a property undergoing extensive renovations.  The workers inhaled toxic vapors from the sealants used in the reconditioning process. Several subcontracted workers in the building filed bodily injury claims totaling $75,000 against the contractor. 
    • An interior contractor was hanging new drywall at a property when an employee accidentally drilled through a small water pipe located behind the wall. The contractor did not realize the leak occurred and a substantial amount of mold grew between the walls. The contractor was held liable for the clean-up of the mold, as well as defense of 3rd party bodily injury claims. Total cost of the loss exceeded $50,000. 
    • While working on a historical property, a contractor used a hole saw to cut through a ceiling. Unknown to the contractor, the saw inadvertently disturbed and released asbestos-containing insulation material. The contractor had to pay cleanup costs for the asbestos fibers released throughout the building, costing in excess of $30,000. 
    • A general contractor was responsible for overseeing the renovation of a hospital wing.  When two patients died in the intensive care unit adjacent to the construction zone, the contractor was sued for inadequate monitoring and containment of the construction zone.  The patients’ cause of death was determined to be an organic fungus found in the ventilation system, and traced back to dusts generated during demolition activities in the construction zone.  The contractor apparently misinterpreted construction drawings with regard to the connection of the duct system for the renovation zone and the intensive care unit.  The general contractor was responsible for $10 million in damages.
    • A general contractor installed new carpeting in an office building. One week after the installation, the owner of the office building informed the contractor that employees were complaining of headaches and dizziness. The contractor could not prove that the manufacturers of the carpet or the carpet adhesive were responsible. The contractor filed a claim with their general liability carrier. The claim was denied because the contractor brought the hazardous materials, such as formaldehyde and volatile organic compounds, onto the site.
    • Several office employees became ill from Legionella.  The cause of the Legionella was the improper sealing for the ducts during the installation of a new HVAC unit, which allowed condensation to build up.  The employees sued the property owner and the contractor.
    • 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

    Commercial contractors generally lack the financial strength to self-insure their environmental liabilities.  Since every commercial 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:  

    • 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. 

    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.  

    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.      

  • ERMI on Contractors Operating Facilities

    Continuing with our environmental risk management series for contractors, you will find attached an environmental Risk Assessment (eRA) for pollution exposures impacting Contractors Operating Facilities.

    So often we strategize on the pollution exposures impacting contractors while operating in the field but what about their office / shop / equipment storage… operations that support their in the field work?  The attached eRA will coach you on the exposures impacting your contracting insureds operating facilities.

    We’ve developed eRA’s for over 80+ classes of business to get you and your clients on the same page about the environmental exposures impacting their operations.  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.

    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.  It genuinely does have a measurable impact to their bottom line and strategic financial planning.

    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 coverage options.

    I want to share with you an email I received from one of our retail agency partners regarding his experience using ERMI eRA’s.

    Email from agent:  All I had to do at the P&C pre-renewal meeting was hand him over your HVAC claims example piece for consideration.  I had his app in my email inbox before I returned to the office.

    ERMI, so much more than a wholesaler, we are your TEAM member for all things environmental.

    Contractors Operating Facilities eRA

    The pollution exposures impacting your contracting work in the field are well documented, but have you considered the pollution risks impacting your owned, rented or leased operating locations?

    Many contractors have physical locations that support their work in the field, which can include offices, storage buildings, equipment/vehicle maintenance facilities, fuel storage, outdoor storage yards, raw materials, etc.

    Depending on the activities taking place at your operating facility(s), environmental exposures impacting your location(s) can include, but are not limited to;

    • Storage of bulk materials such as adhesives, stains, fuel, etc. which can be hazardous in the event of severe weather, fire, or faulty work.
    • Storm water run-off from machinery and/or materials stored outdoors on the property, & employee parking lots.
    • Underground ground & above ground storage tanks, totes, barrels, drums, etc.
    • Unknown contamination from historical property uses
    • Storage of waste oils, anti-freeze, batteries, hydraulic fluid, etc.
    • Illegal dumping of waste by 3rd parties (midnight dumping)
    • Vandalism creating a pollution liability
    • Pollutants from neighboring properties migrating onto your property
    • Mold, asbestos, silica, lead, etc.
    • Impacting underground utilities
    • Nuisance odors from batch plants, idling equipment, etc.
    • Loading and unloading products/materials over unsealed or cracked surfaces
    • Devaluation of property value due to a buyer’s uncertainty concerning possible present contamination

    Environmental Loss Examples

    1. While moving a large piece of equipment at a contractor’s storage facility, the forklift operator hit an aboveground storage tank releasing 10,000 gallons onto the ground that migrated onto neighboring properties before emergency response crews could respond. Area businesses and residents were evacuated.  Claims for bodily injury, cleanup, property damage… exceeded $400,000.
    2. During the night an unknown party illegally placed drums of hazardous liquid into a dumpster at a drilling contractor’s equipment storage facility. The containers were not leaking, but the cost to properly dispose of the hazardous liquid cost the drilling contractor roughly $50,000.
    3. A trucking contractor’s vehicle wash bay experienced a release from the piping system, causing a substantial amount of cleaning solvents to enter the surrounding soil and ground water.  Cost to remediate the cleaning solvents from the soil and ground water was in excess of $250,000.
    4. A construction management company was remodeling and expanding their home office. During the project, the excavation contractor hired to prepare the site for the expansion excavated through and ruptured an unmarked gas line. The excavation contractor was liable for cleanup costs and business interruption expenses, which totaled over $300,000. Due to the size of the loss, the excavation contractor was forced out of business, leaving the construction management company (property owner) to cover the costs.
    5. A HVAC contractor was hired to upgrade the heating system at a construction management company’s office. While working in the building, the HVAC contractor failed to vent the system properly, causing a release of carbon monoxide. Employees at the office began complaining of headaches and nausea, and were rushed to the local hospital. As a result, several bodily injury suits were filed against the construction management company (property owner of the office building) in excess of $1,000,000.
    6. The concrete secondary containment of a 10,000-gallon aboveground diesel storage tank located at a contractor’s office/storage facility cracked. The release from the tank spilled 8,000 gallons into the containment area of the tank. Over the weekend diesel fuel seeped into the underlying soils. Total cost for investigation, removal, and disposal exceeded $320,000.
    7. A contractor routinely stored barrels of fuel, oil, anti-freeze, paint thinners, and other solvents at their outdoor storage yard. While loading about 1,000 pounds of potentially hazardous products onto a truck, five barrels slipped off the fork lift releasing the contents. Fortunately, the contracting company had an emergency response plan in place and their emergency response team was able to contain most of the contaminants.  Cost of the additional cleanup was $70,000.

    Insurance Product Solution

    Environmental Impairment Liability (EIL)

    Sometimes referred to as Pollution Legal Liability, EIL is for contractors that own, rent, lease, or occupy a property, which is susceptible to economic loss caused by pollution that actually, or allegedly originated from their location, or migrates onto their location from a neighboring property.

    EIL Policies Can Provide Coverage for

    • New pollution conditions and/or unknown preexisting conditions
    • Third party bodily injury & property damage
    • on and off site clean-up costs
    • 3rd and/or 1st party business interruption
    • Legal defense expenses
    • Above ground storage tanks
    • Non-Owned Disposal Site Liability
    • Transportation Pollution Liability
    • Can be included with Contractors Pollution Liability on a package policy
    • Blanket coverage for insureds with multiple locations

    Policy Terms, Limits, & Premiums

    • Minimum premiums start at $2,000 for $1M/$1M limits
    • $5,000 minimum deductible
    • Up to $25M in limits available
    • Multi-year terms available up to 10-years

  • ERMI on Contractors Operating Facilities

    Continuing with our environmental risk management series for contractors, you will find attached an environmental Risk Assessment (eRA) for pollution exposures impacting Contractors Operating Facilities.

    So often we strategize on the pollution exposures impacting contractors while operating in the field but what about their office / shop / equipment storage… operations that support their in the field work?  The attached eRA will coach you on the exposures impacting your contracting insureds operating facilities.

    We’ve developed eRA’s for over 80+ classes of business to get you and your clients on the same page about the environmental exposures impacting their operations.  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.

    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.  It genuinely does have a measurable impact to their bottom line and strategic financial planning.

    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 coverage options.

    I want to share with you an email I received from one of our retail agency partners regarding his experience using ERMI eRA’s.

    Email from agent:  All I had to do at the P&C pre-renewal meeting was hand him over your HVAC claims example piece for consideration.  I had his app in my email inbox before I returned to the office.

    ERMI, so much more than a wholesaler, we are your TEAM member for all things environmental.

    Contractors Operating Facilities eRA

    The pollution exposures impacting your contracting work in the field are well documented, but have you considered the pollution risks impacting your owned, rented or leased operating locations?

    Many contractors have physical locations that support their work in the field, which can include offices, storage buildings, equipment/vehicle maintenance facilities, fuel storage, outdoor storage yards, raw materials, etc.

    Depending on the activities taking place at your operating facility(s), environmental exposures impacting your location(s) can include, but are not limited to;

    • Storage of bulk materials such as adhesives, stains, fuel, etc. which can be hazardous in the event of severe weather, fire, or faulty work.
    • Storm water run-off from machinery and/or materials stored outdoors on the property, & employee parking lots.
    • Underground ground & above ground storage tanks, totes, barrels, drums, etc.
    • Unknown contamination from historical property uses
    • Storage of waste oils, anti-freeze, batteries, hydraulic fluid, etc.
    • Illegal dumping of waste by 3rd parties (midnight dumping)
    • Vandalism creating a pollution liability
    • Pollutants from neighboring properties migrating onto your property
    • Mold, asbestos, silica, lead, etc.
    • Impacting underground utilities
    • Nuisance odors from batch plants, idling equipment, etc.
    • Loading and unloading products/materials over unsealed or cracked surfaces
    • Devaluation of property value due to a buyer’s uncertainty concerning possible present contamination

    Environmental Loss Examples

    1. While moving a large piece of equipment at a contractor’s storage facility, the forklift operator hit an aboveground storage tank releasing 10,000 gallons onto the ground that migrated onto neighboring properties before emergency response crews could respond. Area businesses and residents were evacuated.  Claims for bodily injury, cleanup, property damage… exceeded $400,000.
    2. During the night an unknown party illegally placed drums of hazardous liquid into a dumpster at a drilling contractor’s equipment storage facility. The containers were not leaking, but the cost to properly dispose of the hazardous liquid cost the drilling contractor roughly $50,000.
    3. A trucking contractor’s vehicle wash bay experienced a release from the piping system, causing a substantial amount of cleaning solvents to enter the surrounding soil and ground water.  Cost to remediate the cleaning solvents from the soil and ground water was in excess of $250,000.
    4. A construction management company was remodeling and expanding their home office. During the project, the excavation contractor hired to prepare the site for the expansion excavated through and ruptured an unmarked gas line. The excavation contractor was liable for cleanup costs and business interruption expenses, which totaled over $300,000. Due to the size of the loss, the excavation contractor was forced out of business, leaving the construction management company (property owner) to cover the costs.
    5. A HVAC contractor was hired to upgrade the heating system at a construction management company’s office. While working in the building, the HVAC contractor failed to vent the system properly, causing a release of carbon monoxide. Employees at the office began complaining of headaches and nausea, and were rushed to the local hospital. As a result, several bodily injury suits were filed against the construction management company (property owner of the office building) in excess of $1,000,000.
    6. The concrete secondary containment of a 10,000-gallon aboveground diesel storage tank located at a contractor’s office/storage facility cracked. The release from the tank spilled 8,000 gallons into the containment area of the tank. Over the weekend diesel fuel seeped into the underlying soils. Total cost for investigation, removal, and disposal exceeded $320,000.
    7. A contractor routinely stored barrels of fuel, oil, anti-freeze, paint thinners, and other solvents at their outdoor storage yard. While loading about 1,000 pounds of potentially hazardous products onto a truck, five barrels slipped off the fork lift releasing the contents. Fortunately, the contracting company had an emergency response plan in place and their emergency response team was able to contain most of the contaminants.  Cost of the additional cleanup was $70,000.

    Insurance Product Solution

    Environmental Impairment Liability (EIL)

    Sometimes referred to as Pollution Legal Liability, EIL is for contractors that own, rent, lease, or occupy a property, which is susceptible to economic loss caused by pollution that actually, or allegedly originated from their location, or migrates onto their location from a neighboring property.

    EIL Policies Can Provide Coverage for

    • New pollution conditions and/or unknown preexisting conditions
    • Third party bodily injury & property damage
    • on and off site clean-up costs
    • 3rd and/or 1st party business interruption
    • Legal defense expenses
    • Above ground storage tanks
    • Non-Owned Disposal Site Liability
    • Transportation Pollution Liability
    • Can be included with Contractors Pollution Liability on a package policy
    • Blanket coverage for insureds with multiple locations

    Policy Terms, Limits, & Premiums

    • Minimum premiums start at $2,000 for $1M/$1M limits
    • $5,000 minimum deductible
    • Up to $25M in limits available
    • Multi-year terms available up to 10-years

  • ERMI on Contractors

    Contractors continue to be the number one class of business Environmental Risk Managers, Inc. (ERMI) writes for our Partner Agencies. The vast majority of this is being driven by contracts requiring contractors to evidence Contractor’s Pollution Liability (CPL) insurance in order to perform their construction services.

    “Back in the day” it was not uncommon for contractors to negotiate the CPL insurance requirement out of the contracts.  Today, so many companies have experienced environmental liabilities created by the contractors they have hired that it’s common practice to require CPL coverage and not negotiate it out of the contract.  Home Depot and Walmart have spearheaded the charge since they each paid multi-million dollar fines to the EPA for liabilities created by their vendor contractors.

    Photo Credit: mytotalretail.com

    ERMI has also developed environmental Risk Assessments (eRA) for a variety of construction classes.  The eRA’s are designed to get you and your client/s on the same page about the environmental exposures impacting their operations.  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.  Our Partner Agencies find utilizing the eRA’s is an excellent way to leverage their insurance sales because an educated insured understands the value investing in an environmental insurance product will add to their business model.

    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 ultimate 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 insurance network to market your client’s submission and supply you with the best coverage options.

    Please let ERMI know how we can assist you to drive your sales of CPL coverage.

  • ERMI on Contractors

    Contractors continue to be the number one class of business Environmental Risk Managers, Inc. (ERMI) writes for our Partner Agencies. The vast majority of this is being driven by contracts requiring contractors to evidence Contractor’s Pollution Liability (CPL) insurance in order to perform their construction services.

    “Back in the day” it was not uncommon for contractors to negotiate the CPL insurance requirement out of the contracts.  Today, so many companies have experienced environmental liabilities created by the contractors they have hired that it’s common practice to require CPL coverage and not negotiate it out of the contract.  Home Depot and Walmart have spearheaded the charge since they each paid multi-million dollar fines to the EPA for liabilities created by their vendor contractors.

    ERMI has also developed environmental Risk Assessments (eRA) for a variety of construction classes.  The eRA’s are designed to get you and your client/s on the same page about the environmental exposures impacting their operations.  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.  Our Partner Agencies find utilizing the eRA’s is an excellent way to leverage their insurance sales because an educated insured understands the value investing in an environmental insurance product will add to their business model.

    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 ultimate 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 insurance network to market your client’s submission and supply you with the best coverage options.

    Please let ERMI know how we can assist you to drive your sales of CPL coverage.

  • Look Out Below

    environmental Strategist, between the lines:  Exacerbate:  means to make worse, aggravate, intensify.  If you exacerbate a pollution incident, under federal law you can be held accountable and have to expense defense dollars, claims management, clean up costs, business interruption, bodily injury, property damage, reputational risk….Contractors pollution liability insurance covers the insured should they cause or exacerbate a pollution incident.

    USA Today is doing a series of pieces on our infrastructure and below are some links to give you some insight why. Contractors, real estate owners, municipalities, or owners or operators of our county’s infrastructure are all potentially at risk (i.e. oil and gas pipelines, water / sewer / storm water pipes, roads, bridges…)  The United States is falling apart and most of it is out of sight so out of mind.

    Exacerbation liabilities have put many a business out of business because they elected to self insure their environmental exposures.  Our aging infrastructure creates a huge exacerbation environmental exposure for those that own, work on or live near our aging infrastructure.  What is your financial assurance strategy?

    http://www.usatoday.com/longform/news/nation/2014/09/23/gas-pipes-cast-iron-deaths-explosions-investigation/15783697/

    http://www.usatoday.com/story/news/local/2014/09/23/pensacolas-aged-gas-mains-cause-concern/16112477/

  • Report backs Chinese drywall health complaints

    environmental Strategist™, between the lines:  Who are you doing business with?  This is the first question a business answers as they develop and execute their environmental Management Strategy (eMS).  The article below is an excellent example of why it’s critical to find out who you are doing business with.

    An eMS is the first step a business takes on their sustainable path.  An eMS is designed to identify your environmental foot print to drive growth and profits in today’s business environment.

    The four footings of an eMS are:

    1. What’s coming in your front door? (Who are you doing business with?)
    2. What goes on inside your corporate walls
    3. What goes out your back door
    4. Who are your neighbors

    For more on developing and executing your eMS go to www.estrategist.com.

     

    Report backs Chinese drywall health complaints

    Elizabeth Weise, USATODAY1:04 a.m. EDT May 2, 2014

    Chinese-made drywall used in more than 20,000 homes in the United States could have caused nosebleeds, headaches, difficulty breathing and asthma attacks in tens of thousands of Americans exposed to it, the federal government said in a long-awaited report released Friday.

    The drywall was installed in mostly Southern homes since 2005, and it has been the subject of multiple lawsuits. In addition to health-related complaints, homeowners have also alleged sulfur dioxide and other chemicals found in the drywall caused foul odors and corroded pipes and wiring. There have been five settlements totaling more than $1 billion, but it’s not clear how much of the drywall was replaced.

    “The bottom line is that this modeling data suggests that levels of sulfur dioxide and other sulfur compounds found in the Chinese manufactured drywall were sufficiently high to result in the health effects people have been reporting,” said Vikas Kapil, chief medical officer with the U.S. Agency for Toxic Substances and Disease Registry at the Centers for Disease Control and Prevention.

    The health research began in 2011 but was not finished until now because of the work necessary to create scientifically valid models that allowed researchers to estimate what the sulfur emissions from the drywall samples “might mean for people in a room in a house” containing that drywall, Kapil said.

    As of Jan. 20, owners of 20,244 properties had registered for compensation in a multistate settlement program overseen by the New Orleans federal court where all the lawsuits were consolidated. Claims have been filed by homeowners, home builders, contractors and construction material distributors.

    The homes smelled like rotten eggs, many reported. Appliances and electronics failed as their wiring corroded and metal in the homes tarnished and pitted.

    The only way to deal with the problem is to rip out and replace the faulty wallboard.

    The drywall, sometimes called wallboard, was imported from China beginning in 2005, after the record-breaking hurricane seasons of 2004 and 2005 created a shortage of U.S.-made wallboard.

    Drywall is made of gypsum plaster pressed between two thick sheets of paper, and is used to make interior walls and ceilings.

    The U.S. Agency for Toxic Substances and Disease Registry sent staff to China, where they obtained samples of wallboard manufactured there in 2005, 2006 and 2009.

    The samples were tested by the Lawrence Berkeley National Laboratory in Berkeley, Calif. Results from those samples were then used to estimate how much of the chemicals would be present in the air of a home with the defective wallboard.

    High levels of sulfur dioxide were found in the samples of Chinese wallboard, as well as hydrogen sulfide, carbon disulfide, methyl mercaptan, dimethyl sulfide, carbonyl sulfide and ethyl mercaptan.

    Samples of U.S.-made wallboard had very low or undetectable amounts of those chemicals.

    The samples gave off the highest amounts of chemicals when they were exposed to hot, humid conditions — much like those found in Florida and Louisiana, two states with the largest number of cases linked to the wallboard.

    Tainted Chinese drywall is no longer sold in the United States since the 2012 passage of the Drywall Safety Act, which set chemical standards for domestic and imported drywall.

  • Wal-Mart’s Environmental Risk Transfer Strategy

    A few years ago we told you about Wal-Mart paying a multimillion dollar fine to the EPA for storm water runoff from their construction sites.  The fines were generated through the construction vendors Wal-Mart hired to do work for them.

    We suggested one strategy Wal-Mart would probably institute would be requiring certain vendors they hire to evidence proof of environmental liability insurance.  That day has arrived.

    Over the course of the last few weeks we have had agents contact us on insureds looking to do work for Wal-Mart but in order to even offer a bid a vendor has to be able to include with their bid package an insurance certificate evidencing proof of Contractors Pollution Liability (CPL) insurance being in force.  So Wal-Mart has gone a step further and said if you do not have CPL in place we do not want you to even submit a bid to us.

    In other words, No CPL, no work with Wal-Mart.

    We all know that Wal-Mart carriers a big stick and the businesses they impact are vast.  So if it makes good business sense for Wal-Mart to require CPL insurance I am sure you will see vendors of Wal-Mart along with other businesses implementing this same risk transfer strategy.

    environmental Strategist, risk management strategy:  For years we have stated that environmental insurance allows insureds to use the environmental insurance they purchase as a marketing tool to drive growth and profits.  Wal-Mart has now reinforced this and do not be surprised when this becomes a requirement for more and more contractors bidding jobs.  We have been seeing this trend growing for years and with companies like Wal-Mart getting on board it just solidifies that CPL coverage will become part of doing business for contractors.