Each year, the losses from Natural Disasters continue to rise. In correlation, we are seeing a rise in the number of lawsuits for environmental liabilities caused by Natural Disasters. For businesses located in areas impacted by Natural Disasters, part of “Best Practices” is having a financial assurance strategy in place.
As ERMI has coached in the past, Natural Disaster Seasons (NDS, i.e. Flooding, Tornados, Forest Fires, Hurricanes…) are a great time to talk pollution. Did you know most pollution policies do not exclude Acts of God. Pollution policies can cover first party business income, loss of rents and much more.
environmental Strategist, between the lines: The reputational risk associated with pollution liabilities is often overlooked or not even considered. One reason for this is environmental liabilities tend to be a severity versus frequency issue.
Volkswagen with their emissions scandal, Flint Michigan and most municipalities with their lead pipes for potable water and the below link updating Lumber Liquidators and the increased risk of cancer for consumers who have used some of their products.
Let’s drill down and look at the small businesses that operate in your community that are exposed to reputational risk due to environmental liabilities such as auto dealers, manufacturers, agricultural, aviation, contractors, golf courses, health care facilities, marinas, gas stations, real estate owners and developers, resorts, schools… all have exposure to reputational risk from environmental liabilities. What is their strategy to deal with this exposure.
As Will Rogers once said “It takes a lifetime to build a good reputation, but you can lose it in a minute.” That certainly holds true for environmental liabilities.
Lumber Liquidators Set To Slump After Revised Cancer-Risk Report
Reuters
Lumber Liquidators shares were set to tumble on Monday after a revised U.S. federal agency report showed people exposed to some types of the company’s laminate flooring were three times more likely to get cancer than previously estimated.
The Centers for Disease Control and Prevention (CDC) said on Feb. 18 it estimated the risk of cancer was six-30 cases per 100,000 people, compared with the two-nine cases it had estimated in a Feb. 10 report. The CDC said the revised results were preliminary.
Lumber Liquidators’ shares were set to open more than 15 percent lower on Monday, which would be the stock’s biggest intraday percentage drop in six months. (Get the latest quote here.)
The CDC said it had used an incorrect value to calculate ceiling height, which meant its estimates of the airborne concentration of cancer-causing formaldehyde were about three times lower than they should have been.
CBS “60 Minutes” reported on Sunday it was alerted to the possibility that scientists had not converted feet to meters in some calculations.
Lumber Liquidators was not available for comment outside regular business hours. It had supported the recommendations of the CDC’s previous report on the safety of flooring made in China between 2012 and 2014.
The company’s’ shares and sales have been in a tailspin since March last year when CBS “60 Minutes” reported the retailer’s laminates from China contained excessive levels of formaldehyde.
Up to Friday’s close of $14.21, Lumber Liquidators’ shares had risen 17.5 percent since the CDC’s initial report. But they are still down 79 percent since the company had in late February last year warned of the CBS report.
We have a great article up on the InCite Performance Group’s Blog. This is an excellent read for all commercial insurance professionals. Please read and contact us with any questions or to discuss further.
“GROWING SALES, WHILE PROTECTING YOUR E&O WITH ENVIRONMENTAL LIABILITY INSURANCE” – Read here
