Tag: pollution

  • Restoration Contractors 

    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. 

    Many insureds 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 insureds exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Restoration Contractors

    May include, but are not limited to: failure to identify or mischaracterize contamination during surveys; faulty design of remedial action and management plans causing bodily injury; diagnostic laboratory errors; hazardous air emission from incomplete abatement; inaccurate post-abatement certification; impacting underground structures from subsurface investigation activities; cross contamination of aquifers due to improper design, selection of materials, equipment leading to remedial system failure; improper installation and permitting of remedial systems leading to hazardous waste releases; failure to notify public and/or EPA of contamination or releases; failure to effectively monitor and maintain safe working conditions; CERCLA liability due to O&M activities at Superfund sites and from waste disposal site selection; vicarious liability due to use of subcontractors and sub-consultants;   inadequate or improper storage of samples; performance of inappropriate/incorrect tests or analytical methods;  exacerbation of preexisting contamination during excavation and cleanup efforts; inadvertent mixing of incompatible wastes; release of oils/fuels from equipment; completed operations exposures due to incomplete or improper line hookup and remedial system construction….

    Claim Scenarios

    1. A fire water restoration contractor was accused of not fully remediating the mold at a home where he was contracted to do so. After further investigation, it was found that the newly discovered mold was caused by an error made by a plumber, who has worked on the property previously. The restoration contractor was removed from the suit. However, they had already incurred over $20,000 in legal defense costs. 
    2. A homeowner hired restoration contractor to dry out a house from water damage. The contractor, without testing for asbestos, starts and finishes the dry out process, inadvertently disturbing asbestos which releases asbestos fibers into the air. After the job is complete, an industrial hygienist, hired by the homeowner, tests for asbestos and finds that it has spread throughout the house due to the dry out process. This results in cleanup costs and allegations of bodily injury resulting from asbestos inhalation, including associated legal defense expenses.

    Benefits of Environmental Liability Insurance

    Because environmental losses are a severity risk, rather than a frequency risk, the majority of restoration contractors lack the financial strength to self-insure their potential environmental liabilities. Since every restoration contractor has notable environmental exposures, consideration to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insuring. 

    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 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. 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, asbestos, defense outside the limits, off-site disposal coverage.   

    Environmental service providers 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 contractors 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 environmental service providers that own, rent, lease, operate or have any other insurable interest in real property (a fixed site facility such as a service garage and shop, transfer/recycling facility, landfill….) 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 over turn 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? 

    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.      

  • Remediation Contractors

    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. 

    Many insureds 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 insureds exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Remediation Contractors

    May include, but are not limited to: failure to identify or mischaracterize contamination during surveys; faulty design of remedial action and management plans causing bodily injury; diagnostic laboratory errors; hazardous air emission from incomplete abatement; inaccurate post-abatement certification; impacting underground structures from subsurface investigation activities; cross contamination of aquifers due to improper design, selection of materials, equipment leading to remedial system failure; improper installation and permitting of remedial systems leading to hazardous waste releases; failure to notify public and/or EPA of contamination or releases; failure to effectively monitor and maintain safe working conditions; CERCLA liability due to O&M activities at Superfund sites and from waste disposal site selection; vicarious liability due to use of subcontractors and sub-consultants;   inadequate or improper storage of samples; performance of inappropriate/incorrect tests or analytical methods;  exacerbation of preexisting contamination during excavation and cleanup efforts; inadvertent mixing of incompatible wastes; release of oils/fuels from equipment leaks and vandalism; trench collapse due to improper shoring; completed operations exposures due to incomplete or improper line hookup and remedial system construction….

    Environmental Claim Scenarios

    1. A consultant hired a driller to perform sampling of subsurface soils. The consultant directed the driller to drill and draw a sample. The driller accidentally advanced through a UST. Both the consultant and driller were sued for $140,000 in damages, including UST repair and soil remediation. 
    2. A consultant provided plans and specification for the installation of monitoring wells at a contaminated facility. Contamination had seeped from the ground surface into a shallow aquifer. Following installation of monitoring wells, sampling showed evidence of contamination in both the shallow aquifer and in lower lying aquifer. The facility owner filed a claim against the consultant, alleging that well placement (location and depth) was responsible for the cross-contamination of the lower lying aquifer. The settlement amounted to $250,000. 
    3. During remedial activities at a Superfund Landfill site, a remedial action contractor (RAC) inadvertently crushed several drums that were improperly classified as empty. As a result, several gallons of hazardous contents were released, causing localized soil contamination. The RAC failed to notify the EPA of the release, which resulted in both criminal and civil actions against the contractor. The RAC was held liable under CERCLA and was required to pay penalties exceeding $6.1 million. 
    4. A remediation contractor excavated a small underground diesel tank near a distribution warehouse and noted that stained soil surrounded the tank. The project manager advised the firm to continue excavating around the tank, which pulled up contaminated soil. Because of the foundations proximity to the distribution center, the excavation of contaminated material without proper shoring equipment caused the building’s wall to collapse. The distribution center’s walls and roof also collapsed. Reconstruction costs, business interruption, lost profits and additional remediation expenses totaled $1.2 million. 
    5. A fire water restoration contractor was accused of not remediating mold at a home where he was contracted to do so. The homeowner had other work performed that caused the mold but brought all contractors and sub-contractors into a lawsuit. The insured incurred $30,000 in costs to defend themselves against the groundless claim.
    6. An environmental services contractor was hired to perform a tank cleaning by their client.  During the tank cleaning, a 4-inch hose connected to the contractor’s vacuum truck failed. 127 gallons of fuel oil was released onto the ground and flowed into an adjacent waterway. The contractor called the 24-hour/7-days a week emergency response hotline, listed in their Contractor’s Pollution Liability (CPL) policy, immediately after the spill.  The insurer coordinated with their local environmental technical consultant and the contractor to respond to the spill. An experienced environmental remediation firm was sent to the site of the release to start the remediation effort.  The local firm also interacted with the State environmental agency on the contractor’s behalf. The contractor’s CPL policy paid $209,000 for expenses associated with this release.
    7. An asbestos abatement contractor was hired along with an electrical contractor to remove asbestos insulation from ceiling mounted light fixtures in an attic.  The asbestos contractor removed the insulation and the electrical contractor was to remove and replace the fixtures.  After hours, someone turned on the lights and the exposed bulb ignited the new insulation which started a fire. In trying to extinguish the fire, water was sprayed in the attic.  The result was fire and smoke damage as well as water damage to the structure and contents.
    8. A mold abatement firm was contracted to remediate mold from a residential condominium complex.  The scope of the contract was for mold remediation but only after the moisture intrusion problem had been repaired by the claimant. Under the direction of the construction manager and environmental consultant on the project, the Insured completed the mold abatement of the buildings. Plaintiff sued for Bodily Injury and Property Damage for mold recurrence.  Insured alleges the repairs to the roof and chimney failed to correct the moisture problems. Carrier is incurring costs associated with the defense coverage.
    9. A remediation firm was hired for an abatement project in an old warehouse. During the selective demolition process, the contractor damaged a hidden water pipe behind the wall.  They immediately shut off the water but contents stored in that area were damaged. Carrier is paying property damage for the structure and the warehouse contents.
    10. A fire and water damage restoration contractor was hired to do the emergency water extraction of a residence.  The homeowner later found dust, had it tested and found that it contained lead.  The homeowner’s personal insurance carrier is alleging the contractor was not properly qualified to do the emergency water extraction, thus causing lead contamination.  Carrier has set the reserve at $15,000 for damages and $5,000 for defense costs.
    11. 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

    Because environmental losses are a severity risk, rather than a frequency risk, the majority of remediation contractors lack the financial strength to self-insure their potential environmental liabilities. Since every remediation contractor has notable environmental exposures, consideration to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insuring. 

    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 Coverages for Remediation Contractors

    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. 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, asbestos, defense outside the limits, off-site disposal coverage.   

    Environmental service providers 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 contractors 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?

    Professional Liability 

    The absolute pollution exclusion in a standard commercial general liability policy excludes sudden and accidental, and gradual pollution losses due to the release of “solid, liquid, gaseous, or thermal irritants or contaminants, including smoke, vapor, soot, fumes, acid, alkalis, chemicals and waste”….  Engineering firms who work in solving environmental exposures faced by their clients need to have coverage for negligent acts, errors or omissions that may result in damages caused by pollution conditions. 

    There are various ways coverage can be written to protect the engineering firm and their clients. Professional liability on a standalone basis or professional liability including general liability (GL) is available. For engineering firms that may also get involved in doing hands on work at the job site, they can add to the coverage contractors pollution liability (CPL) insurance, (refer to contractors pollution liability insurance for more details). Coverage for the professional liability is done on a claims made basis. For the GL and CPL, coverage can be on a claims made or occurrence form basis. 

    You have to also keep in mind there are contractors that in the performance of their work may act in a consultants or engineers capacity. You need to make sure you offer your client the broadest program available to meet their needs. By combining the coverage’s under one contract you are eliminating potential gaps in coverage.  Coverage can be purchased on a job specific basis or to cover all the work performed by your client on an annual basis. 

    Coverage applies specifically to services / operations identified under the policies declaration page.   

    Environmental Impairment Liability (EIL) 

    EIL is for environmental service providers that own, rent, lease, operate or have any other insurable interest in real property (a fixed site facility such as a service garage and shop, transfer/recycling facility, landfill….) 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.      

  • Legionella Tool Kit

    environmental Strategist between the lines:  There has been a noticeable increase in the number of Legionnaires claims over the past few years.  Below you will find a link to the Legionella Tool Kit.  The Tool Kit can offer great value to your insureds with exposure to Legionella.

    Who has exposure to Legionella?  Legionnaires Disease is a bacteria that can create an environmental liability for those using central air conditioning systems, fountains, room-air humidifiers, ice-making machines,  whirlpool spas, water heating tanks & systems, showers, swimming pools, misting systems typically found in grocery-store produce sections, cooling towers used in industrial cooling systems, evaporative coolers, nebulizers, humidifiers, windshield washers, physical therapy equipment….

    Pollution insurance policies protect insureds for Legionella liability and much more.

    https://www.cdc.gov/legionella/maintenance/wmp-toolkit.html

  • Lawsuits filed for contamination after Hurricane Harvey

    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.

    http://abc13.com/liberty-county-sues-arkema-plant-owners-for-$1m-/3206668/

  • Lawsuits filed for contamination after Hurricane Harvey

    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.

    http://abc13.com/liberty-county-sues-arkema-plant-owners-for-$1m-/3206668/

  • 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

  • Michael Jordan Owned Golf Course Pollutes St. Lucie River in Violation of Florida Rule

    Besides the obvious reputational risk associated with environmental liabilities, the deeper story for your High Net Worth Insureds is making sure they have a financial assurance strategy in place to protect themselves from environmental liabilities created by the vendors they hire.

    A few years ago, both Home Depot and Wal-Mart paid multi-million dollar fines for storm water runoff from their construction sites. Home Depot and Wal-Mart do not own construction companies, so the liabilities came to them from the vendors they hired to perform the construction. This is the same scenario now impacting Michael Jordan.

    After paying their multi-million dollar fines, Home Depot and Wal-Mart implemented a financial assurance strategy were as contractors must evidence proof of Contractors Pollution Liability insurance in force before they can begin work for either company. Wal-Mart has since taken it one step further where contractors can’t bid jobs without first evidencing Contractors Pollution Liability insurance being in place.

    If Home Depot and Wal-Mart feel a need to have a financial assurance strategy in place to protect their assets from the vendors they hire, why should it be any different for your High Net Worth insureds.

    Environmental Risk Manager, Inc. (ERMI) pollution liability insurance program for your High Net Worth insureds can protect them from pollution liabilities like Michel Jordan is facing and considerably more.

    Attached is an environmental Risk Assessment (eRA) for High Net Worth insureds. The eRA is designed to get you and your High Net Worth Insureds on the same page about the environmental exposures impacting their resources. We send our eRA’s in a Word format, so you can cut and paste it into a marketing presentation that compliments your agencies marketing program.

    ERMI 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 strategic financial planning.

    The eRA comes 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 High Net Worth insured’s, so they can make an informed decision if investing in the ERMI High Net Worth Pollution Insurance product will add value in protecting their resources.

    If your High Net Worth insured sees value and elects to further pursue environmental insurance coverage, ERMI’s TEAM of environmental Strategist® are here to assist you.

    Insurance professionals not discussing pollution exposures with their High Net Worth insured’s, may find their E&O insurance is the only coverage their insured may have when they experience an environmental liability.

    https://www.tcpalm.com/story/news/local/indian-river-lagoon/health/2018/02/02/construction-michael-jordan-owned-golf-course-polluting-south-fork-st-lucie-river/301580002/

  • Natural Disaster Seasons Are A Great Time To Talk Pollution Insurance

    2017 Set Record for Losses from Natural Disasters:  Insurers are set to pay out a record $135 billion to cover losses from natural disasters.

    As ERMI has coached in the past, Natural Disaster Seasons (NDS, i.e. Flooding, Tornados, Forest Fires, Hurricanes, earthquakes…) are a great time to talk pollution.  Did you know most pollution policies do not exclude Acts of God.

    During NDS, national and local media are lighting up the airways / internet highway with all the pollution problems caused by natural disasters.  You hear about storage tanks releasing their contents as debris crashes into them during flood season.  Pollutants spread out over miles from tornados or hurricanes.  Forest Fires engulfing communities and causing explosions that release pollutants in the air and the list goes on.

    Note:  Pollution losses tend to be a severity versus frequency issue.

    The Prospects you want to strategize with on the value pollution insurance adds to their business model during NDS are those that feel they do not have a pollution exposure.  For this example, let’s use real estate owners.  For sake of avoiding an argument, agree with the real estate owners they do not have a pollution exposure, but then ask, what if a natural disaster deposits pollutants onto your real estate?

    Note:  Under federal law, the real estate owner is ultimately responsible for the environmental condition of their property.

    It may not be until years later when the real estate owner goes to sell their property and an environmental site assessment unveils an environmental problem from pollutants deposited during NDS.  Whose responsible?

    Since every business is impacted by environmental exposures, it’s now part of “Best Practices” for businesses to have a financial assurance strategy in place to address their exposure to environmental liabilities caused by Natural Disasters.

    As your team member for all things environmental, let ERMI know how we can assist you to drive your sales during NDS.

    http://www.advisen.com/tools/fpnproc/news_detail3.php?list_id=1&email=chris@ermi.us&tpl=news_detail3.tpl&dp=P&ad_scale=1&rid=300316308&adp=P&hkg=v17ZNLMWEU

  • Sorry Charlie!

    Sorry Charlie!

    environmental Strategist®, between the lines:  eS can’t understate the reputational risk associated with environmental liabilities.  The article below on StarKist Tuna being fined and penalized for a variety of environmental violations is a reputational risk.  Unfortunately, since it happened on the American Samoa and not the mainland, it won’t get the same news coverage.  Did you hear about this?

    As the article states “Today’s agreement will help prevent hazardous releases at the StarKist facility, protect workers and the local community, and reduce pollution discharged into Pago Pago Harbor by more than 13 million pounds each year,”.  Should I buy StarKist tuna that contaminated their workers, community and environment or a different brand?  Not the words you want going through the minds of shoppers that buy tuna.

    After more than 30 years as an environmental risk manager, one common theme between businesses big and small is they struggle with managing their environmental exposures.  The value you bring in assisting businesses with managing and transferring their environmental exposures can’t be understated.  It also separates you away from the competition while positioning you as a trusted advisor and strategic partner.  www.estrategist.com was developed to assist you with managing and transferring your client’s environmental expousres.

    The oxymoron with StarKist, without water, StarKist has no product to sell yet their operations were contaminating the water.

    StarKist Paying CWA Penalty, Improving American Samoa Plant

    https://eponline.com/Articles/2017/09/13/StarKist-Paying-CWA-Penalty.aspx?Page=2