Tag: environmental liabilities

  • Major Supermarket Chain Fined Over Refrigerant Leaks

    environmental Strategist, between the lines:  Reputational risk associated with environmental liabilities can devastate a business.

    Besides reputational risk, environmental liabilities create financial stress due to clean up, legal costs, investigation costs, third party bodily injury, third party property damage, third party business income and much more.  Since every business is impacted by environmental exposures and at least 90% of the businesses in the United States can’t afford to self-insure the environmental exposures impacting their operations, pollution liability insurance has proven to be a sound investment versus self-insuring.

    Refrigerants make air conditioning and refrigeration possible.

    What businesses do you work with that have this same environmental exposure as Trader Joes due to their use of refrigeration systems?  Agriculture operations, food processors, restaurants, resorts, educational institutions, transportation / logistics companies, warehouses, convenience stores / gas stations, contractors that service refrigeration systems / HVAC, commercial real estate owners, medical facilities, laboratories, ice rinks and many, many more.

    UNITED STATES - NOVEMBER 30: A Trader Joe's store in Riverside, CA, November 30, 2006. Trader Joe's is a chain of grocery stores that will be affected by Tesco's move into the United States. Cheshunt, England-based Tesco Plc plans to create a U.S. convenience store brand, taking on chains such as 7-Eleven Inc. and locally run grocers for the money spent by Southern California's time-pressed shoppers. (Photo by Francis Specker/Bloomberg via Getty Images)

    Trader Joe’s penalized $500,000 over refrigerant leaks

    , USA TODAY1:39 p.m. EDT June 22, 2016

    Trader Joe’s, the boutique supermarket chain known for its healthy and exotic foods, has agreed to a $500,000 settlement arising from leaky refrigeration systems that contribute to global warming under an agreement with the federal government.

    The chain is expected to spend an additional $2 million over the next three years as part of a settlement announced Tuesday by the Justice Department and Environmental Protection Agency to improve the equipment at 453 stores nationwide. The stores have been leaking a coolant called R-22, which government attorneys say depletes the ozone layer and is a greenhouse gas. They had alleged the leak violates the Clean Air Act and federal stratospheric ozone regulations.

    “Some of the refrigerants now in use by Trader Joe’s are up to 4,700 times more potent than carbon dioxide,” said Alexis Strauss, acting regional administrator for EPA’s Pacific Southwest region. “Today’s settlement will affect all of Trader Joe’s current and new stores to prevent the release of approximately 31,000 metric tons of carbon-equivalent greenhouse gases.”

    National Director of Public Relations for Trader Joe’s, Alison Mochizuki, released the following statement regarding the settlement: “Trader Joe’s looks forward to working with the EPA in its mission to reduce air pollution and protect the ozone layer, and, with this agreement, has committed to reducing its emissions to a rate that matches the best of the industry.”

    Trader Joe’s, based on Monrovia, Calif, becomes the third grocery chain to face concerns about refrigerant leaks. Previous cases have been filed against Safeway and Costco Wholesale for similar leaks of ozone-depleting refrigerants since 2013. All three companies are also being required to heighten their leak monitoring and recordkeeping, as well as electronic reporting to the EPA.

  • Environmental Liabilities After A Fire

    fire

    12/29/15 – By Chris Bunbury

    environmental Strategist, between the lines:  Follow-up to an article we sent out titled “Must Read For Insurance Professionals That Sell Commercial Fire Insurance Policies”.

    In the article we highlighted how after a fire, the contaminated goo left by the fire department can create environmental liabilities for the insured to dispose of the contamination not to mention potential long term environmental liabilities on the insureds property and third party claims for bodily injury, property damage, business interruption, disposal costs, legal fees, investigation costs….

    The article also pointed out how the fire department is immune from environmental liability and under Federal law the property owner is ultimately responsible for the environmental condition of their land regardless of who caused the contamination.  So, bottom line is fires can create a huge E&O exposure for insurance professionals that sell fire insurance that do not strategize with insureds on potential environmental liabilities and how pollution insurance can fill in gaps in standard P&C coverage’s.

    Environmental Risk Managers, Inc. (ERMI) recently received a submission from one of our Partner agencies for an insured that owns and operates a warehouse.  The insured recently experienced a partial fire loss of just $180,000.  The insured has an opportunity to land a large client but the potential client requires the warehouse to have pollution insurance should they experience an environmental liability with their operation while warehousing the clients products.

    In marketing the submission to environmental insurance carriers ERMI received the following email from an underwriter:  “I am going to pass on this one due to the fire loss this past July.  In order to reconsider I would need results of environmental assessment performed after the fire and a description of any remediation.  And a detailed description of fire prevention and response loss control measures implemented since the loss.”

    I share this because it supports the fact environmental underwriters understand and have experienced the environmental liabilities caused by fires.  Also, fires create unscheduled expenses for the insured due to potential environmental liabilities.

    This is just another example of why pollution liability insurance has become part of “Best Practices” for insurance professionals.  As your environmental team member ERMI can assist you to make pollution liability insurance and risk management part of your daily business model to drive sales while reducing your E&O exposure.