The fact is, simply do to their resources, High Net Worth (HNW) insureds are impacted by a wealth of environmental exposures. Until Environmental Risk Managers, Inc. (ERMI) introduced their HNW pollution program, self-insurance was basically the only option for HNW insureds in addressing their environmental exposures.
As the links below point out, a yacht owner is now paying legal fees to try to be made whole from a fire loss to his $24,000,000 yacht while it was in dry dock for repairs. While the insurance carrier is denying coverage, had this insured had an ERMI HNW insurance pollution policy they could have been covered for the pollution caused by the fire along with legal fees, clean up, third party bodily injury, third party property damage, third party business income, natural resource damages and much more.
While the shipyard where the work was being performed settled with the yacht owner for $9,200,000, the company that caused the loss has closed and its owners have fled the country.
Do you know if your HNW insureds like self-insuring their environmental exposure or would they prefer to transfer their environmental exposure for fractions of a cent on the dollar to the ERMI HNW pollution program? Have you asked?
The fact is, simply do to their resources, High Net Worth (HNW) insureds are impacted by a wealth of environmental exposures. Until Environmental Risk Managers, Inc. (ERMI) introduced their HNW pollution program, self-insurance was basically the only option for HNW insureds in addressing their environmental exposures.
As the links below point out, a yacht owner is now paying legal fees to try to be made whole from a fire loss to his $24,000,000 yacht while it was in dry dock for repairs. While the insurance carrier is denying coverage, had this insured had an ERMI HNW insurance pollution policy they could have been covered for the pollution caused by the fire along with legal fees, clean up, third party bodily injury, third party property damage, third party business income, natural resource damages and much more.
While the shipyard where the work was being performed settled with the yacht owner for $9,200,000, the company that caused the loss has closed and its owners have fled the country.
Do you know if your HNW insureds like self-insuring their environmental exposure or would they prefer to transfer their environmental exposure for fractions of a cent on the dollar to the ERMI HNW pollution program? Have you asked?
environmental Strategist, between the lines: In a past article, “Must Read For Insurance Professionals That Sell Commercial Fire Insurance Policies,” I strategize why insureds need a financial assurance plan before a fire occurs to address environmental liabilities caused by fires. After a fire occurs, insured’s need monies to address the contamination left behind by the firefighters in putting out the fire along with charred, toxic remnants of real and personal property.
Fire policies generally offer a token amount to address clean up after a fire. The cleanup limit offered in a fire policy is substandard because the insurance carrier does not want to foot the bill for pollution liabilities that result due to a fire. Environmental insurance plays a critical role in filling in this coverage gap created by fire policies.
Offering substandard cleanup limits is the same strategy executed by standard property & casualty insurance carriers who offer “limited pollution coverage”. The term “limited pollution coverage” is an oxymoron because the “limited pollution coverage”, limits the insurance carrier’s exposure to paying for a pollution claim and has a very tight window to discover and report a pollution claim for coverage to be in force.
As the article below points out, adding fuel to the fire (pun intended), 3M, a manufacturer of firefighting foam is being sued because the suit claims, “the foam chemicals are persistent when released into the environment and harmful.”
So if the lawsuit turns out to be true, firefighters are using known contaminants to put out a fire and yet fire departments are immune from environmental liabilities in the course of putting out a fire.
What is your insured’s financial assurance strategy to address environmental liabilities after a fire?
Fill out the attached application and ERMI will negotiate for environmental insurance to fill in the coverage gap for your insureds you sell fire policies to.
environmental Strategist, between the lines: In a past article, “Must Read For Insurance Professionals That Sell Commercial Fire Insurance Policies,” I strategize why insureds need a financial assurance plan before a fire occurs to address environmental liabilities caused by fires. After a fire occurs, insured’s need monies to address the contamination left behind by the firefighters in putting out the fire along with charred, toxic remnants of real and personal property.
Fire policies generally offer a token amount to address clean up after a fire. The cleanup limit offered in a fire policy is substandard because the insurance carrier does not want to foot the bill for pollution liabilities that result due to a fire. Environmental insurance plays a critical role in filling in this coverage gap created by fire policies.
Offering substandard cleanup limits is the same strategy executed by standard property & casualty insurance carriers who offer “limited pollution coverage”. The term “limited pollution coverage” is an oxymoron because the “limited pollution coverage”, limits the insurance carrier’s exposure to paying for a pollution claim and has a very tight window to discover and report a pollution claim for coverage to be in force.
As the article below points out, adding fuel to the fire (pun intended), 3M, a manufacturer of firefighting foam is being sued because the suit claims, “the foam chemicals are persistent when released into the environment and harmful.”
So if the lawsuit turns out to be true, firefighters are using known contaminants to put out a fire and yet fire departments are immune from environmental liabilities in the course of putting out a fire.
What is your insured’s financial assurance strategy to address environmental liabilities after a fire?
Fill out the attached application and ERMI will negotiate for environmental insurance to fill in the coverage gap for your insureds you sell fire policies to.
environmental Strategist®, between the lines: In follow up to our recent article on “Natural Disaster Seasons Are a Great Time To Talk Pollution Insurance”, please see the article below that reviews pollution liabilities created by wildfires. These same contaminants are released during a residential or commercial building fire.
Fire policies typically exclude coverage for the cleanup of resulting contamination caused by a fire. Since the majority of real estate owners cannot afford to self-insure their exposure to pollution liabilities as a result of a fire, what is their risk transfer strategy? Pollution insurance fills in the gap created by fire policies excluding pollution resulting from a fire. Any insureds who own property need to have a strategy in place for handling the aftermath of a fire.
Research from California fires that have burned through homes and communities suggests such blazes leave a threatening legacy of caustic ash and toxic heavy metals. (Scott Olsen/Getty Images)
Fort McMurray wildfire will leave toxic legacy, experts say
Mixed with water, ash almost as caustic as oven cleaner, U.S. Geological Survey says
By Bob Weber, The Canadian PressPosted: May 09, 2016 1:22 PM MT Last Updated: May 09, 2016 2:12 PM MT
Danger from the Fort McMurray wildfire that has destroyed entire city blocks in the northern Alberta city won’t end when the flames stop.
Research from California fires that have burned through homes and communities suggests such blazes leave a threatening legacy of caustic ash and toxic heavy metals.
“There’s no doubt, it is hazardous,” said Scott Stephens, a fire scientist at the University of California Berkeley.
California has sad experience with wildfires raging through urban areas. Every summer, said Stephens, the state loses homes to marauding flames from the woods.
Wildfires big and bad enough to force their way into communities are generally hot enough to burn off hydrocarbons such as vinyl siding, nylon carpets or household chemicals.
“Fires really do incinerate most of that material,” Stephens said. “No doubt that has an impact on air quality, but the vinyls, the tires, the materials that you’d never think would burn … most of that stuff is gone.”
House fires can burn for more than an hour at temperatures reaching 1,500 C, he said.
“You’ll look and try and find your dishwasher or your refrigerator. You might find its motor, you might find a few things, but a lot of it has just disappeared.”
But the ash left behind poses real threats.
The U.S. Geological Survey found ash left after California’s home-destroying wildfires in 2007 and 2008 was far more alkaline than ash from wood fires. Mixed with water, the ash was almost as caustic as oven cleaner.
Ash contaminated with heavy metals
It was also significantly contaminated with metals, some of them toxic. Arsenic, lead, antimony, copper, zinc and chromium were all found at levels exceeding Environmental Protection Agency guidelines.
Ash particles from urban-wildfire blazes tended to be smaller and more easily inhaled. Both arsenic and hexavalent chromium — a form of the metal known to cause lung cancer — were more readily taken up by lung fluids than they were in water.
Many counties treat ash from such fires as hazardous waste, said Geoff Plumlee, a geochemist who conducted much of the U.S. research.
“When large numbers of buildings burn, that does create a situation where there’s potential for much higher levels of metals to get out into the environment.”
California experts say anyone returning to a home burned in a wildfire should dress protectively — long sleeves and pants, gloves, boots, masks and goggles. People are urged to stir up the ash as little as possible.
Alberta’s last experience with a forest fire destroying homes came in Slave Lake, where more than 400 homes and other buildings were levelled in 2011 — about one-quarter as many as were burned in Fort McMurray. The ash from that fire was disposed of as hazardous waste.
Tests of the ash found lead, a powerful neurotoxin especially dangerous to children, was at three times the recommended levels for residential soils. Dioxins and furans, some of which are highly potent carcinogens, were anywhere from 13 to 52 times the guideline levels.
Government officials argued the ash shouldn’t be held to the same standards as soil and said the ash was not a health risk. But scientists at the time questioned that assessment.
Plumlee emphasized that risks are manageable and fade over time. Ash quickly becomes less caustic when it mixes with small amounts of carbonic acid in rainfall.
But the risks are real.
“It’s not alarmist at all. We don’t really know if there are long-term effects,” he said. “(But) there are common-sense things people can do to minimize their exposure.”
Firefighters work to extinguish a fire at Gene’s Auto Parts in Traverse City, MI ~ Record Eagle/Tessa Lighlty
What You Need To Be Discussing With Your Clients About The Aftermath Of A Fire and How Pollution Insurance Can Play A Role
The Article and related links below highlight a simple fire that took place at Gene’s Auto Parts near Traverse City Michigan. Gene’s does auto salvage and parts sales. Some of the contaminants that were probably released during the fire would be air emissions from burning tires, plastic, inventory…, cadmium, lead, asbestos, petroleum products, anti-freeze, mercury…. Are these contaminants covered under the fire policies you sell? What is your strategy to fill in this gap?
Businesses that can have similar environmental exposures as Gene’s Auto Parts due to a fire would be auto manufacturers & dealers, commercial truck manufacturers & dealers, agricultural equipment manufacturers & dealers, trucking companies, marina’s & ports….etc
If your client purchases fire insurance and experiences as loss, what happens after the fire department puts out the fire? The water and chemicals used to put out the fire mix with anything which melted or was released during the fire including the charred remains. Often times this leaves behind a toxic goo creating a pollution liability for the property owner. The fire department is immune.
If the property owner does not have a pollution policy and they experience a fire, there are a lot of costs the insured is self-insuring. As your client’s professional risk manager have you informed them of the potential pollution exposures they are self-insuring? What about third party bodily injury from neighbors inhaling fumes? What about third part property damage to neighbors when the goo migrates on to their property, cost for emergency response crews, defense costs, investigation costs, business interruption…?
Insurance professionals that sell fire insurance and do not educate their insureds on the value pollution insurance offers, are opening themselves up to an E&O suit. Not to mention this creates a professional reputational risk exposure as well.
Environmental Risk Managers is here to assist you with all things environmental! Including the aftermath of a fire like this.
Megan Woods, Reporter – 9&10 News
Blair Township fire destroys business, closes busy road
By ERIN SLOAN esloan@record-eagle.com and TESSA LIGHTY tlighty@record-eagle.com
TRAVERSE CITY — Clouds of heavy smoke billowed into the sky over Blair Township when an auto parts shop caught fire, triggering the closure of a major roadway. Fire crews on Friday responded to Gene’s Auto Parts on M-37 shortly before noon, said Blair Township Fire Chief Jim Carroll.
The blaze started in a back building where cars are deconstructed and salvaged, he said.”The building is really hard to get around in inside and we tried to hold it to the back building as long as we could and then it went over our heads into the next building forward,” Carroll said. “We’ve gotten it away from the office.” Chris White, an office employee at the shop, was working in the front office when flames erupted.”We didn’t think that it was going to affect us, but it started spreading so they said ‘get out,’” she said. “Very sad. Very sad how people are going to be out of a job. It’s just scary.” White said she was able to save some files from the office before being evacuated. “We couldn’t get the water into the back part but then things started to get really heavy — smoke and heat so we decided we had to come out,” Carroll said.
The building, which is most likely a total loss, was difficult to maneuver around, especially with the heavy, black smoke that enveloped the property, Carroll said. “It’s one of the biggest I’ve seen,” Carroll said. Crews battled the flames from ladder trucks and the ground outside of the building, but the thick smoke became a concern after one firefighter was sent to a local hospital for observation, he said.No one else was injured before or during the blaze. Carroll was unsure what caused the fire as of Friday afternoon.”It’s all car parts. All the little bangs and beeps and explosions you hear are actually mostly airbags,” he said. “Everything else in there is OK, but there is metal.”
Jack Akers, a resident who lives across the street from the shop, and was a longtime friend to the company’s founder, the late Gene Denman.”It almost makes me cry because I’ve seen (Gene) start it,” Akers said. “I thought they had it under control and it’s just gone, it’s gone. I’m just wondering what in the world the dollar amount is going to come out to.”Akers has watched his friend’s business grow for years from its Acme location to the one between Nimrod and Blair Town Hall roads. The business celebrated 50 years in 2014.”I feel closer to it than anyone else because of the friendship, and we were friends. I’ve seen him grow this business from Acme to here and then see it grown into a million-dollar business. That’s the part that really hurts,” Akers said.American Red Cross Disaster Services arrived on scene as soon as they could to help keep emergency crews fed and hydrated, said Bud Ingram who serves on the organization’s action team.
“We were paged by dispatch to offer assistance,” Ingram said. “We scrambled out to get coffee and pizza for everyone.”Ingram made a stop at a Holiday gas station for donated coffee, and picked up pizza, crackers, sports drinks and bottled water for the crews. M-37 was closed for at least five hours Friday as Blair Township Fire, Grand Traverse Metro Emergency Services and Grand Traverse Rural Fire battled the flames and Grand Traverse County sheriff’s deputies diverted traffic.
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.
I often talk on the three benefits environmental insurance offers insureds besides what most people think of, first party cleanup.
3 benefits of environmental insurance:
Defense Coverage
Specialists to assist you in handling a claim
Coverage for third party Bodily injury, third party property damage, Third party business interruption.
You can read the story below and view videos on how a simple boat fire impacts all three of the benefits offered by environmental insurance. I would also like to point out that over the years when I have strategized on marine fires the quick response back I most often hear from the environmentally uninformed is a boat will burn and sink, besides fuel you won’t have any other liabilities. Read On!
La Conner boat fire 2/21/14. Photo courtesy of the Seattle Times
La Conner marina fire: sunken boats and ‘broken hearts’
A fire destroyed seven boats and damaged at least eight more, totaling an estimated $1 million in damage at Shelter Bay Marina near La Conner in Skagit County on Friday afternoon.
The fire started at about 4 p.m. on one boat at the residential marina and quickly spread to adjacent boats, according to Shelter Bay community manager David Franklin.
One dock was engulfed in flames, which allowed one burning boat to float to another dock and further spread the fire, he said.
Firefighters were able to contain the damage on the adjacent dock, but they weren’t able to fully knock down the fire until shortly after 6 p.m., Franklin said.
“There were no injuries,” he said, “just a lot of broken hearts for those boats that were lost.”
Dylan Furst, of Bellingham, said he saw the cloud of black smoke from about two miles away while he was driving to Bellingham from Deception Pass. He could smell the smoke from more than 400 yards away, he said.
Furst said firefighters had trouble aiming directly at the flames because the boats kept drifting.
“It was just one big fire of boats,” Furst said. “They weren’t separated at all.”
Firefighters from multiple agencies responded, including the Swinomish Reservation, Skagit County, La Conner and the U.S. Coast Guard.
Some residents tried to move unaffected boats away from the flames as firefighters battled the blaze with water and foam, the Swinomish Yacht Club reported via Twitter.
“With boat fires, with the water, fiberglass, fuel and the intensity of the flame, it’s very difficult to put out,” La Conner Fire Chief Dan Taylor said.
The 15 boats that burned are 40- to 50-foot pleasure craft kept at the 325-slip marina in the private, gated community of Shelter Bay on the Swinomish Channel. Six of the seven boats that were destroyed sank, and the seventh was severely burned, Skagit County Fire District 13 Chief Roy Horn told the Skagit Valley Herald.
One resident told the newspaper that his $300,000 yacht, with 400 gallons of diesel fuel, burned and then sank.
“They were nice boats,” Franklin said. “Very nice boats.”
Franklin said officials will work to determine the cause and the full extent of the damage Saturday, as well as the possible environmental impacts, including the diesel fuel that leaked into the channel.
“We’ll see what the morning light brings,” Franklin said. “Hopefully, tomorrow, it won’t be as bad as we think.”
Material from The Associated Press was used in this report.
Recovery operations of several sunken ships continue this week in Shelter Bay. Crews were able to remove two damaged vessels this weekend but have run into problems recovering the remaining five ships. Fire damage to the ships has complicated the salvage efforts.
Crews are also using placing booms and absorbent pads on the water to recover fuel after discovering skimmers to be ineffective. Damage is estimated at more than $1 million. The cause is still under investigation.
Update:All burned boats removed from La Conner marina
The Associated Press LA CONNER, Wash. —
All six boats that sank during the fire at the Shelter Bay Marina in La Conner have been pulled from the water.
Ecology Department spokeswoman Lisa Copeland also says 600 gallons of diesel were removed from a seventh vessel that was destroyed in Friday’s fire but did not sink.
The Skagit Valley Herald reports (http://bit.ly/1k9f0HC ) cleanup of an estimated 2,400 gallons of spilled oil and fuel may continue through Friday.
Copeland says there have been no reports of oiled birds or other impact to wildlife.
The property loss from the fire is estimated at more than $1 million.
These videos give a prime example of the public outcry that results when pollution incidents occur, and show another major reason why environmental liability coverage is such a valuable asset for businesses. Especially when local residents are potentially impacted and government regulators get involved –
