Tag: medical

Pharmaceutical Companies
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. What pollutants are impacting your business?

Environmental Exposures Impacting Pharmaceutical Companies

May include, but are not limited to; Air emissions; Storm water runoff; PFAS chemicals; Pollution from neighboring property migrating onto yours; Vapor intrusion; mold, Legionella, bacteria… in air conditioning and heating systems, cooling towers…; Sick building syndrome; Spills or leaks from underground and/or above ground storage tanks; Pollution cleanup and liabilities that occur after a fire; Easements that cross the property that may leak or spill hazardous materials; Acidic laboratory and maintenance chemicals; Natural resource damages; Unsealed truck ramps; Improper maintenance of laboratory hood filters; Insufficient pretreatment of wastewater discharge to wastewater treatment plant; Corroded wastewater and storm water sewers; No auditing of waste handling and disposal companies; Janitorial cleaning compounds; Adverse reactions and interactions of chemical compounds that accidentally commingle during a fire; Halon release from fire suppression equipment; Spills and leaks from the storage and handling (loading/unloading) of material containers such as, drums, totes, bags from vehicles or rail cars; Onsite storage of hazardous materials; Historical disposal practices for hazardous, infectious, medical and radioactive waste….

Environmental Loss Examples
1. A pharmaceutical company disposed of its science lab wastes in a 40-year-old, 20,000-gallon underground storage tank. The underground tank ruptured and contaminated the soil including private wells and the groundwater that flowed into a nearby reservoir. Several third parties sued the pharmaceutical company, with claims totaling $450,000. In addition, costs to clean up the reservoir amounted to $1.1 million.
2. In the lab of at a pharmaceutical company, experiments were being conducted in an area with a faulty ventilation system. When the system failed, toxic fumes were released outside the building. As a precaution, nearby businesses were evacuated. The pharmaceutical company was sued for several third party claims, along with a $215,000 in business interruption claims from nearby businesses that were evacuated.
3. A pharmaceutical company was discharging liquid lab waste into a wastewater treatment plant on the property, which was hooked-up the local municipal treatment system. When the plant failed, toxic liquids contaminated the publicly owned treatment works (POTW), forcing its temporary closure. The pharmaceutical company was charged with $2,500,000 for environmental cleanup and contingent business loss that resulted from the contamination of the POTW.
4. A company decided to expand their building onto the site of a former parking lot. During excavation, petroleum hydrocarbon contamination was discovered. The pharmaceutical company had no idea of the historical use of the area. Investigation and sampling pinpointed the source and extent of contamination. On-site treatment and/or cleanup costs exceeded $800,000.
5. A plumbing was hired to work on a lab. While dismantling laboratory piping, the contractor discovered an existing mercury spill that resulted in mercury contamination throughout the building. Costs to clean up the contamination and restore the building to its original condition were $350,000.
6. The concrete secondary containment of a 10,000-gallon aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons of hazardous liquid into the tank containment area. The liquid seeped into the underlying soils. Total cost for investigation, removal and disposal exceeded $320,000.
7. During the night, an unknown party illegally placed drums of hazardous waste into a dumpster. The containers were not leaking, but the cost to properly dispose of the illegally dumped waste cost the company roughly $75,000.
8. A waste hauler was hired to transport manifested waste materials to a 3rd party disposal site. During transportation the hauler got into an accident, causing the truck to overturn and spills its load into a nearby stream. Under CERCLA, commercial insureds must contribute for their apportionment of the load for cleanup cost since federal law states that you own your waste from cradle to grave. Cost to settle the claim was $700,000.
9. While transferring products from one truck to another, a forklift operator cut a corner to tight causing the load to shift and spill. Cost to clean up exceeded $100,000.
10. A fire ignited at a pharmaceutical manufacturing facility, sending hazardous vapors into the atmosphere, and hazardous liquids into the soil. A class action lawsuit was filed in the community for health problems, property damage from firewater runoff, and 3rd party business interruption. The pharmaceutical company also had to pay for the remediation of the toxic sludge that pooled in the building’s foundation as a result of the fire. The total cost of the claim exceeded $3,000,000.
Benefits of Environmental Liability Insurance

Because environmental accidents/conditions are a severity risk, rather than a frequency risk, most pharmaceutical companies lack the financial strength to self-insure their environmental liabilities. Since every pharmaceutical company is impacted by environmental liabilities, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of their risk transfer.

Three Overlooked Benefits of environmental liability insurance:
1. 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
2. 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….?
3. 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 create an environmental loss.
Environmental Liability Coverages

Environmental Impairment Liability (EIL)

EIL is for pharmaceutical companies susceptible to economic loss caused by pollution that actually or allegedly originated from their operations. Sometimes referred to as pollution legal liability this coverage is for those who own, operate, lease, or have any other insurable interest in real property and the operations. Coverage can be written in a variety of ways addressing unknown preexisting conditions or new conditions. Coverage can include third party bodily injury and property damage along with business interruption and extra expense, on and off site cleanup costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multiyear terms.

Property Transfer Coverage

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. This coverage not only helps to keep the property at its maximum value, it will assist the purchaser in being able to secure the necessary financing to complete their transaction.

Transportation Pollution Liability

Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of their cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and over turn of transported cargo.

Underground & Aboveground Storage Tanks

Financial responsibility requirements ensure that owners and operators of underground storage tank systems can 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 system.

Contractors Pollution Liability (CPL)

Pharmaceutical companies have potential indirect environmental exposures from the vendors you hire to perform services. Should your vendors cause an environmental problem or exacerbate an existing environmental issue their general liability insurance policy typically will have an absolute or total pollution exclusion. In order to be protected you should make sure your vendors have CPL insurance coverage before they begin doing work.

As the owner of the property you have 2 options
- Option #1: Require all contractors performing work on your property to carry Contractors Pollution Liability insurance. Most policies will contain language that includes blanket additional insureds.
- Option #2: Buy an Owner Controlled CPL policy for your project. This works the same as option #1, except you are the named insured and control the policy. Unfortunately, it’s common for a contractor to purchase CPL coverage to close the contract, only the cancel the policy shortly thereafter. By purchasing an owner controlled CPL policy, you
May 12, 2022
Medical Offices
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. What pollutants are impacting your business?

Every medical office operating today faces numerous environmental exposures. The following is a partial list of environmental exposures faced by medical offices or by the vendors they hire.

Environmental Exposures Impacting Medical Offices

Include, but are not limited to: Sick Building Syndrome (mold, Legionnaires, vapor intrusion); Radiation; Waste water from radiology services; Pollution from neighboring properties migrating onto yours (vapor intrusion); Disposal of pharmaceuticals, Pollution cleanup and liabilities that occur after a fire; Medical and hazardous waste; Storm water runoff (i.e. parking lots, chemicals used for landscaping…); Utility easements that cross property which may leak or spill hazardous materials; On site storage of hazardous materials / wastes; Illegal disposal practices by vendors for hazardous/medical and solid wastes; Mercury in fluorescent lights, thermometers and other medical equipment; Sample Pharmaceuticals stored on site; Latex Allergies; Storage tanks used for backup power generator fuel; Leaks from elevator hydraulic fluid storage tanks; Possible adverse reactions and interactions of chemical compounds that accidentally commingle during a fire….

Environmental Loss Examples: Medical Offices
- A mechanical contractor removed ductwork from a medical facility’s HVAC system. It was later determined that the ductwork was home to a dangerous fungus. The dismantling activities and the on-site storage of dismantled ductwork caused the fungus to spread into the building. Employees became infected with the fungus some were even critically infected. The contractor was found liable for the spread of the fungus and had bodily injury and property damage claims in excess of $1 million. Even though the medical facility was not at fault, they had expenses of $100,000 for legal defense and $50,000 for claims management.
- A wastewater treatment plant that was 25 years old had been upgraded several times over the years. Improper closure of an old clarifier and on-site surface impoundment had allowed gradual seepage into groundwater. These constituents contaminated the underlying groundwater, which was a potable water supply for the neighboring community. The costs for groundwater cleanup and emergency water supply for residents totaled $550,000.
- A medical laboratory experienced an unknown release of mercury. The mercury was discovered several years later, after the laboratory was no longer in use, and the building had been converted to offices. Under CERCLA (Comprehensive Environmental Response, Compensation and Liability Act), the medical lab was responsible to perform the cleanup. The medical lab faced a costly cleanup, adverse publicity, and potential bodily injury claims from the building’s current occupants. Cost of remediation totaled more than $300,000.
- A dental office for years let old silver fillings go down the drain that went to an onsite septic system. Testing of a nearby stream revealed high levels of contaminants. The source was determined to be the silver fillings in the septic system. Cost of remediation exceeded $250,000.
- A medical office’s maintenance staff was performing a routine check of the emergency backup power system. The backup power generator was located on the roof of the building and the diesel fuel to run the generator was in a 5,000 gallon underground storage tank. After testing was completed the generator was shut off but a faulty valve allowed for diesel fuel to continue to be pumped from the underground storage tank. 3,000 gallons of fuel was pumped from the tank, flowed onto the roof and down drain spouts before it was discovered. Since there were several drain spouts the diesel fuel created several contaminated areas that had to be cleaned up. Remediation of the ground and neighboring stream exceeded $400,000.
- A contractor was hired to remove a leaking underground storage tank. During the excavation they discovered they were not dealing with one tank but four. The cost of the job more than tripled from the original estimate.
- The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils and required costly excavation and removal. The total cost for investigation, removal and disposal exceeded $320,000.
- A medical facility hired a contractor to remove two underground storage tanks and associated contaminated soil. During storage tank removal, the contractor’s backhoe hit a natural gas pipeline causing an explosion. Third parties filed bodily injury claims against the contractor, as well as the hospital, claims exceeded $2.5 million.
Benefits of Environmental Liability Insurance

Unlike most liability exposures impacting medical offices, pollution losses are not a frequency risk, but rather a severity risk. For this reason, the majority of medical offices lack the financial strength to self-insure their environmental liabilities. Since every medical office 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 Products

Environmental Impairment Liability (EIL) aka Site Pollution Liability

EIL will protect medical facilities for exposure to economic loss caused by pollution that actually or allegedly originated from your operations. Sometimes referred to as pollution legal liability this coverage protects insured’s that own, rent, lease, occupy or have any other insurable interest in real property and the operations. Coverage can be written in a variety of ways addressing unknown preexisting pollution conditions or new conditions. Coverage can include third party bodily injury and property damage along with business interruption and extra expense, on and off site cleanup costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multi year terms. Most EIL policies cover above ground storage tanks, some can cover underground storage tanks.

Property Transfer Coverage

When buying, selling or being gifted 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. This coverage not only helps to keep the property at its maximum value, it will assist the purchaser in being able to secure the necessary financing to complete their transaction.

Transportation Pollution Liability

Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of their cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and over turn of transported cargo. Note: An MCS 90 is not pollution coverage. Since CERCLA states you own your waste from cradle to grave it is critical to know who you are doing business with and if there is a spill or release of your waste, you need to have a strategy in place to address the potential liabilities.

If you buy your products or materials FOB point of shipment, you need to give serious consideration to making sure you or the transporter is covered for a pollution loss during transit or loading and unloading of the vehicle. Many hospitals and medical facilities deal with radioactive medicines and other environmentally sensitive materials, these can be shipped by air and not vehicle. Sidetrack agreements with railroads need to address this issue.

Note: For doctor’s offices, you have potential indirect environmental exposures from the vendors you hire to perform services. Should your vendors cause an environmental problem or exacerbate an existing environmental issue their general liability insurance policy generally will have one of two things – An Absolute or Total Pollution Exclusion. In order to be protected you should make sure your vendors have this insurance coverage before they begin doing work.

Contractors Pollution Liability (CPL)

This coverage can be purchased to meet two specific exposures. First, contractors that perform remedial activities (asbestos, lead, mold, soil or ground water remediation, emergency response) there is the standard contractor’s pollution liability (CPL) insurance coverage. This protects the insured for pollution conditions they may cause or if they exacerbate an existing situation while performing remedial services. This is for covered operations performed by or on behalf of the insured. The loss must occur away from any premises the insured owns, rents, leases or occupies, in other words while they are performing remedial services at Pullman Regional Hospital.

Secondly, standard contractors (i.e. general contractors, HVAC, plumbing, electrical, mechanical, janitorial, demolition, drilling, excavation, highway, street and paving contractors, rigging, utility, millwrights, artisan, etc.), in performing their services may cause an environmental liability that is generally excluded from their general liability coverage. For these contractors there is contingent contractor’s pollution liability (CCPL) coverage. Basically they are afforded the same coverage as remedial contractors but the cost to purchase this insurance is substantially less.
May 12, 2022
Hospitals & Medical Facilities
What is a Pollutant?

Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. In other words, something that ends up where it doesn’t belong. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances.

Most commercial insureds assume that claims arising from their operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves commercial insureds with gaps in coverage. What pollutants are impacting your business?

Environmental Exposures Impacting Hospitals & Medical Facilities

May included, but are not limited to: Legionnaires; Air emissions from medical waste incinerators; Spills or leaks from aboveground/underground storage tanks and piping; Sick building syndrome; Vapor intrusion; PFAS Chemicals; Bacterial or infectious air releases from faulty HVAC systems; Pollution liabilities and clean up that occur after a fire; Air release from on-site refrigeration systems; Sewer and septic system contamination from the disposal of laboratory wastes, pharmaceuticals and chemicals into sinks, Leaks from elevator hydraulic fluid storage tanks; Historical contamination; Easements that cross property which may leak or spill hazardous materials; Janitorial cleaning compounds; Asbestos; Lead; Inadequate hazardous and infectious waste management program; Property donated or purchased; Spills and leaks from the storage and handling (loading and unloading) of materials / supplies…; Laundry Operations; Illegal disposal practices by vendor’s for hazardous, medical and radionuclide wastes; Incomplete incineration of harmful biological materials, plastic bags, petri plates, tubing; Poor information on the possible adverse reactions and interactions of chemical compounds that accidentally commingle during a fire; Radioactive material in equipment and medications: Mercury in fluorescent lights, thermometers; Parking lots and garages….

Environmental Claim Scenarios
1. A mechanical contractor removed ductwork from a hospitals HVAC system. It was later determined that the ductwork was home to a dangerous fungus. The dismantling activities and the on-site storage of dismantled ductwork caused the fungus to spread into the hospital. Patients became infected with the fungus some were even critically infected. The contractor was found liable for the spread of the fungus and had bodily injury and property damage claims in excess of $1 million. Even though the hospital was not at fault, they had expenses of $100,000 for legal defense and $50,000 for claims management.
2. A hospitals wastewater treatment plant that was 25 years old had been upgraded several times over the years. Improper closure of an old clarifier and on-site surface impoundment had allowed gradual seepage into groundwater. These constituents contaminated the underlying groundwater, which was a potable water supply for the neighboring community. The costs for groundwater cleanup and emergency water supply for residents totaled $550,000.
3. A medical laboratory experienced an unknown release of mercury. The mercury was discovered several years later, after the laboratory was no longer in use, and the building had been converted to offices. Under CERCLA (Comprehensive Environmental Response, Compensation and Liability Act), the medical lab was responsible to perform the cleanup. The medical lab faced a costly cleanup, adverse publicity, and potential bodily injury claims from the building’s current occupants. Cost of remediation totaled more than $300,000.
4. A medical facility for years let old silver fillings go down the drain that went to an onsite septic system. Testing of a nearby stream revealed high levels of contaminants. The source was determined to be the silver fillings in the septic system. Cost of remediation exceeded $250,000.
5. A medical facility hired a consultant that failed to delineate wetlands on property, which was to be developed into a new medical professional building. As a result, the medical building had to be re-engineered, thus delaying its opening. The settlement amounted to $2 million.
6. A street and road contractor was hired to apply a sealing coat to a new concrete parking garage next to a hospital. During the application of the sealant, fumes migrated into the hospitals air intake system. Several patients and hospital staff were overcome by fumes and became ill. Lawsuits were filed alleging bodily injury and asserting damages in excess of $1,000,000.
7. Legionella was discovered in the water supply of a major metropolitan hospital. An entire wing of the hospital needed to be vacated and patients removed while the water system went through treatment for the Legionella. In addition to the remediation costs, several patients sued the hospital claiming bodily injury from exposure to Legionella.
8. A mechanical contractor was hired to perform HVAC repairs at a hospital. No medical procedures were performed during the actual renovation activities and proper measures were taken to ensure proper encapsulation. Despite the controls, one year after completion of the project, the contractor was notified that several aspergillus (a type of mold species) infections had occurred several months after valve replacement surgeries. Internal and government investigation identified the source as the hospital operating room shortly after the renovation. The hospital was sued by several of the patients sustaining secondary infections. The hospital and the contractor contributed to settle the claims.
Underground & Above Ground Storage Tank Loss Examples
1. A hospitals maintenance staff was performing a routine check of the emergency backup power system. The backup power generator was located on the roof of the hospital and the diesel fuel to run the generator was in a 5,000-gallon underground storage tank. After testing was completed the generator was shut off but a faulty valve allowed for diesel fuel to continue to be pumped from the underground storage tank. 3,000 gallons of fuel was pumped from the tank, flowed onto the roof and down drain spouts before it was discovered. Since there were several drain spouts the diesel fuel created several contaminated areas that had to be cleaned up. Remediation of the ground and neighboring stream exceeded $400,000.
2. A contractor was hired to remove a leaking underground storage tank. During the excavation they discovered they were not dealing with one tank but four. The cost of the job more than tripled from the original estimate.
3. The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils and required costly excavation and removal. The total cost for investigation, removal and disposal exceeded $320,000.
4. A contractor was hired to remove two underground storage tanks and associated contaminated soil. During storage tank removal, the contractor’s backhoe hit a natural gas pipeline causing an explosion. Third parties filed bodily injury claims against the contractor, as well as the hospital, claims exceeded $2.5 million.
Benefits of Environmental Liability Insurance

Unlike most liability exposures impacting hospitals, pollution losses are not a frequency risk, but rather a severity risk. For this reason, many hospitals lack the financial strength to self-insure their environmental liabilities. Since every hospital 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.

Three Overlooked benefits of environmental liability insurance:
1. 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.
2. 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….?
3. 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 Products

Environmental Impairments Liability (EIL) aka Site Pollution Liability

EIL is for hospitals and medical facilities susceptible to economic loss caused by pollution that actually or allegedly originated from their operations. Sometimes referred to as pollution legal liability this coverage is for those who own, operate, lease, or have any other insurable interest in real property and the operations. Coverage can be written in a variety of ways addressing unknown preexisting conditions or new conditions. Coverage can include third party bodily injury and property damage along with business interruption and extra expense, on and off site clean-up costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multiyear terms. Most EIL policies cover above ground storage tanks.

Transportation Pollution Liability

Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of their cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and over turn of transported cargo. Note: An MCS 90 is not pollution coverage. Since CERCLA states you own your waste from cradle to grave it is critical to know who you are doing business with and if there is a spill or release of your waste, you need to have a strategy in place to address the potential liabilities.

If you buy your products or materials FOB point of shipment, you need to give serious consideration to making sure you or the transporter is covered for a pollution loss during transit or loading and unloading of the vehicle. Many hospitals and medical facilities deal with radioactive medicines and other environmentally sensitive materials, these can be shipped by air and not vehicle. Sidetrack agreements with railroads need to address this issue.

Underground & Above Ground Storage Tanks

Financial responsibility requirements ensure that owners and operators of underground storage tank systems can 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 system. Several states offer tank funds. It is necessary to make sure if your state has a tank fund that is financially sound and the time it takes to get reimbursed.

Note: For hospitals and medical facilities, you have potential indirect environmental exposures from the vendors you hire to perform services. Should your vendors cause an environmental problem or exacerbate an existing environmental issue their general liability insurance policy generally will have either an absolute or total pollution exclusion. In order to be protected you should make sure your vendors have this insurance coverage before they begin doing work.

Property Transfer Coverage

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. This coverage not only helps to keep the property at its maximum value, it will assist the purchaser in being able to secure the necessary financing to complete their transaction.
May 11, 2022