Tag: pollution

  • INTRODUCING MERGERS, ACQUISITIONS, AND POLLUTION PROTECTION COVERAGE

     

    FOR IMMIDIATE RELEASE 6/23/16 – ENVIRONMENTAL RISK MANAGERS, INC. (ERMI) INTRODUCES MAPP PRODUCT TO ADDRESS TRANSACTIONAL RISKS

    Environmental Risk Managers, Inc. has announced a new product to address exposures related to business & property transactions. The Mergers, Acquisitions, and Pollution Protection (MAPP) product combines Representations & Warranties (R&W) Insurance with Pollution Liability Insurance.

    For those not familiar with R&W insurance, it’s designed to provide coverage for the breach of a representation or a warranty contained in a Buy / Sell Agreement, in addition to, or as a replacement for all or most of the seller’s contractual representations and warranties.

    Brooks Bunbury, Vice President of ERMI, sees a growing need for a combined product to address the environmental and transactional exposures created via indemnifications in standard buy/sell agreements. “Over the last decade we have seen a steady increase in the number of M&A deals (Mergers & Acquisitions) which require Pollution Liability Insurance for deals to close. Over this same time, we have seen a growing interest in incorporating R&W Insurance into M&A transactions as well. As a general rule, R&W policies typically exclude coverage for pollution.” Mr. Bunbury went on to explain, “At the end of the day, all sides of the deal want a clean transaction. By offering R&W, Tax Liability, and Pollution Liability Insurance individually, or combined in a package, our new MAPP product does just that. It allows all parties to go their separate ways while reducing the risk of un-forecasted liabilities arising from the transaction”

    Insurance industry data has revealed that one out of every four M&A deals has at least one claim of a breach of the reps and warranties after closing. “As we have seen from environmental indemnifications in transactional documents, if there’s not a pre-determined financial assurance mechanism in place, the environmental indemnification that the seller agrees to may not be worth the paper it’s written on.”

    “In the past, the response to an issue after closing has been to negotiate around the problem.  Unfortunately, negotiating is expensive, time consuming and rarely brings about the most desirable outcome for all involved parties. MAPP addresses the unknowns by providing financial assurance should a problem arise after closing, therefore creating a cleaner transaction with less risk. With MAPP, ERMI has raised the bar on financial assurance for M&A deals.”

    Environmental Risk Managers, based in Leland, Michigan was founded in 1992 as a specialty Environmental Liability Insurance wholesaler. With an emphasis on education, ERMI combines their product knowledge with superior marketing to provide the highest level of service in the industry.

    “We’re excited to leverage our proven strategies in the Pollution Liability Insurance market to support companies with their transactional insurance needs.”

    For more information, please contact Brooks Bunbury with Environmental Risk Managers.

  • CDC Concerned Over Growth In Legionnaires Cases

    environmental Strategist, between the lines:  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 systems, showers, misting systems typically found in grocery-store produce sections, cooling towers used in industrial cooling systems, evaporative coolers, nebulizers, humidifiers, windshield washers….

    A little background:  Legionnaires is a bacteria that got its name after a 1976 outbreak at an American Legion Convention in Philadelphia.  221 people contracted the bacteria and 34 died.

    What risk management strategy are you implementing to address exposure to Legionnaires Disease for your client’s?  Pollution liability insurance can protect property owners or those with an insurable interest for their exposure to Legionnaires.

    CDC officials said this new study was prompted by two factors: First, the public notoriety of cases over the last three years that included, first, the Pittsburgh VA, then a cooling tower outbreak in New York City, and, last year, the outbreak in Flint, Mich.
    CDC officials said this new study was prompted by two factors: First, the public notoriety of cases over the last three years that included, first, the Pittsburgh VA, then a cooling tower outbreak in New York City, and, last year, the outbreak in Flint, Mich.
    By Sean D. Hamill / Pittsburgh Post-Gazette

    Legionnaires’ cases in the United States quadrupled from 2000 to 2014, with about 5,000 people a year — and probably many more — now being infected by the deadly form of pneumonia, but the exact reason for the growth is unclear, officials with the federal Centers for Disease Control and Prevention said Tuesday.

    And too many of those cases occur during an outbreak, CDC Director Tom Frieden said Tuesday in a phone call with reporters to announce the publication of a comprehensive study on outbreaks published on the CDC’s Vital Signs webpage.

    “I’ll give you the bottom line [of the study] right off the top: Almost all Legionnaires’ disease outbreaks are preventable with improvements in water system management,” he told reporters.

    During that 15-year period of 2000 to 2014, the CDC investigated 27 confirmed, land-based — as opposed to ship-based — Legionnaires’ outbreaks.

    Those outbreaks included the 2011 and 2012 Veterans Affairs Pittsburgh Healthcare System that the CDC determined infected 22 people and led to the deaths of six of them. Overall, 415 people were infected in the 27 outbreaks, and 65 of them died, the CDC said.

    PG chart: Legionnaires’ cases increasing
    (Click image for larger version)

    The CDC study found that in 23 of the 27 outbreaks it investigated there were “gaps in maintenance that could be addressed with a water management program to prevent Legionnaires’ disease outbreaks…”

    There were many more people sickened and killed during other outbreaks the CDC was unable to investigate during that timeframe. It noted in the study that from just 2000 to 2012, it had requests to investigate about 160 outbreaks.

    CDC officials said this new study was prompted by two factors: First, the public notoriety of cases over the last three years that included, first, the Pittsburgh VA, then a cooling tower outbreak in New York City, and, last year, the outbreak in Flint, Mich.

    In addition, last summer, after nearly a decade of work, the American Society of Heating, Refrigerating and Air-Conditioning Engineers — known as ASHRAE — completed its recommendations for dealing with the water-borne disease of Legionella in building water systems. ASHRAE’s recommendations are expected to eventually find their way into many of the country’s state or local building codes, carrying the power of law.

    Since last summer, though, the CDC “heard the ASHRAE standards weren’t easy to understand unless you were a building engineer,” Dr. Frieden said.

    As a result, the CDC on Tuesday also released an online “Toolkit” that it hopes will make adopting the ASHRAE standards easier for building owners and managers.

    The Toolkit was piloted in Flint, where the CDC took it to building owners and managers who were impacted by the outbreak there that infected 91 people — including 50 cases in a local hospital.

    In addition to the few, widely publicized outbreaks that occur annually, the CDC said it is equally concerned about the overall rise in Legionnaires’ cases, with more than 5,000 annually, nearly all of which occur without little to no publicity.

    “And we think [the number of people infected] is much higher,” said Cynthia Whitney, co-author of the Vital Signs study, “not because we don’t hear about the cases, but because we believe they’re never diagnosed.”

    The number of cases may be rising steadily for a variety of reasons, she said, including: More healthcare professionals know to look for it; better testing; a larger, more vulnerable and aging population; and a warmer climate that makes it easier for Legionella — the bacteria that causes Legionnaires’ disease — to grow.

    Victor Yu and Janet Stout, two Pittsburgh-based Legionnaires’ experts who were not involved in the CDC study, noticed in the Vital Signs report, however, that the CDC said nothing about regularly testing a building’s water for Legionella, something they have recommended for 30 years.

    “The CDC has a long history of recommending not looking for Legionella as a prospective element to assess risk,” Dr. Stout said.

    The CDC has said for decades that it believed testing regularly for Legionella would give building owners a false sense of security since people have contracted the disease when there were no signs of the bacteria in the water system.

    Dr. Whitney said there is no testing recommendation in the Vital Signs study because “we didn’t want to get into it.”

    But she said because the ASHRAE standards now recommend testing water, the CDC has now changed its position on testing since last summer.

    “We are not against testing” water for the presence of Legionella, she said. “We think it has its place, particularly in healthcare facilities.”

    Sean D. Hamill: shamill@post-gazette.com or 412-263-2579 or Twitter: @SeanDHamill.

    First Published June 8, 2016 12:00 AM

  • Wild Fires Causing Pollution Losses

    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)
    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 Press Posted: 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.”

  • Dairy Farm Turning Waste Into Energy

    environmental Strategist, between the lines:  Studies have stated agriculture accounts for 80% of the worldwide fresh water consumption and contaminates 70% of our waterways.  However, each and every one of us depend upon agriculture.  Understanding that just by their very existence agricultural operations are polluters, the question becomes how can agricultural operations pollute in a way that has the least amount of impact upon human health and the environment?

    The article below highlights a growing trend in the livestock industry.  As you go through the article, I have highlighted in red the pollution insurance coverage appropriate for the various environmental exposures.

    Cows
    Cows eat at Scenic View Dairy in Fennville on Tuesday, April 19, 2016. The farm produces its own electricity with an anaerobic digester which runs on methane from manure. (Neil Blake | MLive.com)

    Dairy Farm Produces Electricity From Manure

    FENNVILLE, MI – Brian Geerlings estimates his 2,000 cows produce enough milk (milk has been classified as a pollutant so Environmental Impairment Liability (EIL) site pollution coverage for the dairy farm and transportation pollution insurance to get the milk to the producer / consumer) each day to supply each resident of Grand Rapids with an 8-ounce glass of milk.

    But that’s not all his cows produce. Thanks to three “anaerobic digesters” that process the manure on the “back end” of the farm, the Scenic View Dairy also generates enough electricity to power more than 700 homes.

    “We’re able to produce our milk with a negative carbon footprint,” says Geerlings, a 36-year-old farmer who moved his Scenic View Dairy to Allegan County from the Zeeland area in 2000 to escape the urban sprawl that inhibited expansion.

    The cows are milked three times a day (Before a cow can be milked they must be washed which produces contaminated waste water.  Washing consumes approximately 40 gallons per cow per day.  Waste water from washing cows accounts for the majority of waste in manure lagoons.  EIL coverage will address these exposures) eating from a carefully blended mix of silage designed to give them the optimal amount of protein, fiber and nutrients. “It’s calculated to produce milk,” says Geerlings, who estimates each cow eats about 110 pounds each day.

    Housed in open-air barns (Air emissions from cows methane, which makes up 10 – 15% of global methane emissions.  EIL coverage for this exposure) designed to keep them comfortable and out of the weather, each cow’s milk output is individually weighed and recorded.

    “We have records from the day she’s born until the day she dies,” said Geerlings, who said the herd produces about 18,000 gallons of milk each day – about 75 pounds per cow.

    After it leaves the cow, the milk is piped into a chiller (Many agricultural products, like milk, need to be kept cold which involves refrigerant chemicals that can release air emissions or spill fluids.  EIL coverage.) and transported within 24 hours by truck to a milk processing plant in Reed City, where it is converted into Yoplait yogurt, or Coopersville, where it dried and used in the food processing industry or sent overseas.  (Products pollution exposure.  Generally, the environmental liability insurance market does not like to offer this coverage on consumable products.)

    That’s on the front end. What makes Geerlings’ farm unusual is his handling of the cows’ manure, which has historically been treated as a smelly nuisance (EIL coverage).

    At Scenic View Dairy, the manure is treated like gold. While the cows are in the milking parlor, their manure is scraped into holding tanks and sent to one of three large green silos (EIL coverage for the storage), where it is heated over a 22-day period.

    The heating process causes the slurry to emit methane gases that are captured by the large cones. As a bonus, capturing the methane gas also eliminates much of the smell associated with the farm. (EIL coverage for air emissions)

    The captured methane is used to fuel two 12-cylinder Caterpillar motors that run round-the-clock (EIL for air emissions) to drive electrical co-generators that supply electricity for the farm and are fed back into the grid operated by Consumers Energy.

    Besides eliminating an electrical bill that could reach up to $15,000 a month, Geerlings estimates he sells about two-thirds of the electricity generated by the farm back to Consumers Energy. “We just renewed our 20-year contract with Consumers,” he said.

    The farm’s negative carbon footprint also allows Geerlings to sell “carbon credits” to companies who need to offset their carbon consumption. While the market price of carbon credits fluctuates, Geerlings estimated he pockets about $50,000 a year from their sale.

    After the methane is extracted, liquid is expelled from the manure and returned to the barns for bedding. Some of the “bio-mulch” also is sold to landscape companies for mulch or soil conditioners. (Depending upon how the bio-mulch is stored you can have a storm water runoff exposure along with the transportation pollution liability exposure to get mulch to landscape companies and consumers.  EIL and transportation pollution liability coverage.  Potential products pollution exposure.)

    The liquid from the manure is stored in lagoons (EIL coverage) and injected back into the 3,200 acres (EIL coverage) which Geerlings owns or rents (Depending upon the rental agreement this could be site pollution coverage or Contractors Pollution Liability (CPL).) in the area to raise corn, soybeans, wheat and rye (EIL coverage for the storage and application of other agricultural chemicals used in order to grow these crops.). Much of those crops are fed back to the herd.

    The digesters not only add cash to Geerlings’ bottom line, but also stabilizes his balance sheet when dairy prices fluctuate.

    “There are times in the past year when the digester has made more than the cows,” says Geerlings, who employs 35 full-time workers. “It takes dedication and it takes focus to make it pay.”

    Jim Harger covers business for Mlive Media Group. Email him at jharger@mlive.com 

    *Link To The Article and Video* 

     

  • What Happens After The Fire…..

     

    BusinessFire
    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.

     

    BusinessFire2
    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.

    Gene’s Auto Parts Fire Additional Links:

    http://www.record-eagle.com/news/local_news/update-blair-township-fire-destroys-business-closes-busy-road/article_378a70ba-9725-5412-af65-b29b74ab200b.html

    https://www.youtube.com/watch?v=bovjrWvXU0s Video

    http://photos.record-eagle.com/Genes-Auto-Parts-Fire-April-8/ Photos

    http://www.9and10news.com/story/31684591/genes-auto-parts-begins-clean-up-after-devastating-fire

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

    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.

    During NDS, national and local media are lighting up the airways / internet highway with all the pollution problems caused by a natural disaster.  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.

    Businesses to strategize 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 on your real estate?  As we move into spring the thoughts of melting snow carrying contaminants to nearby waterways to be deposited downstream during flood season to unsuspecting real estate owners in one simple example.

    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.

    NDS and pollution insurance go together like April showers that bring May flowers.

  • Environmental Liabilities Create Reputational Risks

    environmental Strategist, between the lines:  The reputational risk associated with pollution liabilities is often overlooked or not even considered.  One reason for this is environmental liabilities tend to be a severity versus frequency issue.

    Volkswagen with their emissions scandal, Flint Michigan and most municipalities with their lead pipes for potable water and the below link updating Lumber Liquidators and the increased risk of cancer for consumers who have used some of their products.

    Whataretheysaying

    Let’s drill down and look at the small businesses that operate in your community that are exposed to reputational risk due to environmental liabilities such as auto dealers, manufacturers, agricultural, aviation, contractors, golf courses, health care facilities, marinas, gas stations, real estate owners and developers, resorts, schools… all have exposure to reputational risk from environmental liabilities.  What is their strategy to deal with this exposure.

    As Will Rogers once said “It takes a lifetime to build a good reputation, but you can lose it in a minute.”  That certainly holds true for environmental liabilities.

    Lumber Liquidators Set To Slump After Revised Cancer-Risk Report

    Lumber Liquidators shares were set to tumble on Monday after a revised U.S. federal agency report showed people exposed to some types of the company’s laminate flooring were three times more likely to get cancer than previously estimated.

    The Centers for Disease Control and Prevention (CDC) said on Feb. 18 it estimated the risk of cancer was six-30 cases per 100,000 people, compared with the two-nine cases it had estimated in a Feb. 10 report. The CDC said the revised results were preliminary.

    Lumber Liquidators’ shares were set to open more than 15 percent lower on Monday, which would be the stock’s biggest intraday percentage drop in six months. (Get the latest quote here.)

    The CDC said it had used an incorrect value to calculate ceiling height, which meant its estimates of the airborne concentration of cancer-causing formaldehyde were about three times lower than they should have been.

    CBS “60 Minutes” reported on Sunday it was alerted to the possibility that scientists had not converted feet to meters in some calculations.

    Lumber Liquidators was not available for comment outside regular business hours. It had supported the recommendations of the CDC’s previous report on the safety of flooring made in China between 2012 and 2014.

    The company’s’ shares and sales have been in a tailspin since March last year when CBS “60 Minutes” reported the retailer’s laminates from China contained excessive levels of formaldehyde.

    Up to Friday’s close of $14.21, Lumber Liquidators’ shares had risen 17.5 percent since the CDC’s initial report. But they are still down 79 percent since the company had in late February last year warned of the CBS report.

  • Lead Contamination And An Aging Infrastructure

    environmental Strategist, between the lines:  The fallout from the Flint, Mi. lead contaminated water crisis is putting the spot light on businesses / municipalities that deliver potable (drinking) water.  Flint estimates it would take $55,000,000 to replace their lead pipes.

    The potable water industry is what some would classify as highly regulated.  However, back when lead pipes were used to supply potable water it was not so regulated because for the most part we did not understand the dangers of lead.

    As the article links below highlight there are many ways environmental problems can flow into potable water and lead is not a Flint environmental exposure but a nationwide environmental exposure.

    A well-known fact is, as our infrastructure (water, sewer, storm water, roads, bridges, dams…) continues to deteriorate, it creates huge environmental exposures for business and municipalities that use / maintain them.  The environmental exposure created by infrastructure deterioration grows with each passing day.

    eS Risk Transfer Strategy:  Businesses and municipalities as part of “Best Practices” must have a financial assurance strategy to address potential liabilities created by deteriorating infrastructure.  A financial strategy to address legal fees, investigation & clean up costs, third party bodily injury, third party property damage, third party business income, disposal costs….  While pollution insurance won’t cover the cost to replace the lead pipes it can cover a lot of associated costs that come from environmental exposures created by deteriorating infrastructure.  Since environmental liabilities are generally a severity versus frequency issue, you must assess the economies of scale afforded by transferring your risk to a third party insurer versus self-insurance.

    Ohio village issued 2nd state EPA violation for lead problems

    CLEVELAND | BY KIM PALMER

    Ohio environmental officials gave a northeast Ohio village another violation for failure to submit two weekly water reports and not communicating test results to homeowners after elevated levels of lead were found in some of the drinking water in January.

    The Ohio Environmental Protection Agency’s Tuesday notice is the latest complaint levied by the state against Sebring, 60 miles (97 km) southeast of Cleveland, after the agency found village officials failed to properly warn residents about water chemistry that caused corrosion in piping leading to 28 homes and one school building in January.

    An Ohio EPA spokeswoman said if Sebring does not fix the problem, the state agency could fine the village or involve the Ohio Attorney General on the criminal side. However, the spokeswoman does not expect either to occur.

    Sebring’s manager, Richard Giroux, said the village believes it was meeting all the state EPA’s deadlines and the discrepancy may have arisen from the initial use of an incorrect address by state officials. The Ohio EPA spokeswoman said miscommunication was not the issue.

    The Ohio EPA first reported elevated lead levels to Sebring officials on Dec. 3. The notice in Ohio follows the controversy over dangerously high lead levels in the water of Flint, Michigan, which has led to calls for the resignation of Michigan Governor Rick Snyder.

    Schools in the Sebring district were closed for three days in January after two samples from Sebring’s McKinley Junior/Senior High School tested with lead levels above federal standards.

    Sebring officials must submit weekly pH and alkalinity monitoring results reports, offer free water quality testing to all residents upon request and provide bottled water or filtration systems to homes where results are over the federal allowable level.

    “When EPA staff followed up this weekend to conduct cautionary testing on a few homes that tested above the federal allowable level, it became evident that the village had not notified these residents of their recent test results as quickly and thoroughly as they should have,” Ohio EPA Director Craig Butler said.

    Water testing results submitted Tuesday found that 664 of 698 samples have tested below the federal allowable level and test results confirm that the village’s water plant is lead free.

    A report by the EPA said that follow-up tests confirm the water coming into the homes is under federal allowable limits and that running water for several minutes successfully eliminates any detectable lead in the water.

    Lead water pipes still a concern in Boston area

    A piece of an old lead water pipe sat next to a new copper pipe on a Lansing, Mich., street.
    DAVE WASINGER/LANSING STATE JOURNAL – A piece of an old lead water pipe sat next to a new copper pipe on a Lansing, Mich., street.

    By GLOBE STAFF 

    Despite drastic improvements in the quality of drinking water over the last few decades, lead is still a concern in thousands of Boston-area homes where water is running through older pipes, officials said.

    More than 20,000 buildings in the area — many built before 1940, when the older service lines were phased out — are fed by lead service lines that run from the main municipal water line into a house.

    Malden is the community with the highest percentage of service lines made of lead; 47 percent of the city’s 11,682 service lines are lead, according to the Massachusetts Water Resources Authority’s best estimates. The next highest rates are in Medford (28 percent), Somerville (22 percent), Marlborough (19 percent), and Winthrop (11 percent).

    Concerns over the amount of lead in water have been reignited in the wake of the water crisis in Flint, Mich., where dangerous lead levels were recently discovered in the water.

    “We’ve been working at this problem as a society for many years, and we’ve actually made a great deal of progress. But there’s certainly more work to be done, which is why we take this so seriously,” said Stephen Estes-Smargiassi, planning and sustainability director at the MWRA.

    The MWRA sends water to 51 cities and towns, including Boston, reaching about 2.2 million people and 5,500 industrial users primarily in Eastern Massachusetts.

    The MWRA says that its water is virtually lead-free when it leaves reservoirs on its way into communities. Water mains, the large pipes that carry water through each town and city, also do not add lead to the water, the authority said. Those mains are made of concrete, iron, or steel.

    In Massachusetts, the installation of lead service lines — narrower pipes that connect mains to individual properties — stopped largely by the 1940s, officials believe.

    It is also possible that homes built before 1986 may have lead solder in their interior plumbing and that faucets made through 2013 may contain enough lead to contribute to elevated lead levels in water.

    The MWRA estimates only about 5 percent of service lines it sends water to are made of lead.

    However, MWRA officials said their records may not be accurate. For example, their records show only about 100 lead service connections in Boston. But the Boston Water and Sewer Commission says there are about 3,500.

    Steps have been taken in recent years to replace lead service lines. But there are obstacles. Replacing them can be expensive for homeowners.

    Joseph Wood, owner of Boston Standard Plumbing, said he does about one lead service line replacement every other month, compared with about two per month 15 years ago.

    He said that the average project costs between $3,500 and $5,000, but the city of Boston offers subsidies and financing that can make such project more affordable for homeowners.

    Lynn Thorp, national campaigns director at Clean Water Action, said more should be done to replace the lines.

    She said that water utilities have not made replacement a priority because there are no regulations requiring them to.

    “We need water systems to do an inventory of lead service lines and come up with a comprehensive plan for how to get lead service lines out of their systems,” Thorp said.

    She advised all residents to have their water tested.

    Philippe Grandjean, a Harvard environmental health professor who has studied lead toxicity, said that while progress has been made to reduce lead levels in water nationwide, residents should remain cautious.

    “It doesn’t mean that we’re safe and that we’ve done enough,” he said. “Every community in this country should be aware that there is a very strong likelihood that there is lead somewhere in the water system.”

    Inside buildings, lead pipes are rare, but pipes made of other materials may be held together with lead solder (which was commonly used before 1986). Brass pipes, fittings, and faucets can contain lead, too.

    One simple but effective measure to reduce the risk: Run cold water for 15 to 30 seconds if the pipes have been unused for a while to clear lead buildup. Experts also advise avoiding the use of more-corrosive hot water from the tap.

    The MWRA, for its part, alters the chemistry of its water, a practice that began in 1996, to make it less corrosive and less likely to cause lead to leach into the water.

    Lead poisoning can cause serious damage to the brain, kidneys, nervous system, and red blood cells, potentially affecting physical development and the ability to learn.

    Small amounts of lead in adults are not thought to be harmful, but even low levels of lead can be dangerous to infants and children.

    “If the lead causes brain damage, that is going to stay for the rest of the child’s life,” Grandjean said. “You only get one chance to develop the brain.”

    Lead poisoning can also be caused by exposure to lead in soil, paint, household dust, food, and certain types of pottery, porcelain, and pewter.

    While standards exist for what is considered a safe level of lead in the blood as well as in drinking water, experts in recent years have stressed that no level is truly safe.

    To monitor lead levels in water, the MWRA conducts tests in about 450 homes across its system annually. Each must meet criteria that makes them likely to have high levels of lead.

    The US Environmental Protection Agency requires that no more than 10 percent of the samples contain levels of lead above 15 parts per billion or corrective measures will be mandated. In 2015, only 2.3 percent of MWRA samples were above the threshold.

    That’s a dramatic reduction from when testing began in 1992. At that time, more than 40 percent of samples had lead levels above the threshold.

    Communities with at least one home that tested above the standard in 2015 were: Boston, Malden, Melrose, Milton, Newton, Somerville, Stoneham, and Winthrop.

    One Malden home had lead levels of 584 parts per billion, by far the worst found.

    “While system-wide results have shown remarkable reductions, MWRA continues to stress that elevated lead levels in any home deserve attention,” the authority wrote in a letter sent last month to local officials to allay fears about the Flint crisis.

    Experts say that a scenario as dire as what unfolded in Flint is unlikely to occur elsewhere because Flint’s problems were caused by a long list of unusual and avoidable failures.

    Thorp said she hoped the Flint case would spur greater awareness of how water systems around the country still need improvement.

    “We do tend to get complacent around many drinking water issues because we’ve made so much progress in this country,” she said.

    “We tend to only react when there’s a crisis revealed. We need to be much more proactive . . . and not just react when there’s a crisis.”

  • Example Of Environmental Economics

     

    In this May 1, 2014 photo, irrigation water runs along the dried-up ditch between the rice farms to provide water for the rice fields in Richvale, Calif. California’s drought-ravaged reservoirs are running so low that state water deliveries to some metropolitan areas have all but stopped, and cutbacks are forcing growers to fallow fields. (AP Photo/Jae C. Hong)
    Irrigation water runs along the dried-up ditch between the rice farms to provide water for the rice fields in Richvale, Calif. California’s drought-ravaged reservoirs are running so low that state water deliveries to some metropolitan areas have all but stopped, and cutbacks are forcing growers to fallow fields. (AP Photo/Jae C. Hong)

    Environmental Strategist, between the lines:  The article below offers an excellent example of why we are transitioning away from our current slash and trash economic platform to an environmental economic platform.

    The basic difference is, under our current slash and trash economic platform our environment is a subset under the economy.  Operating under an environmental economic platform the opposite is true, our economy is a subset under the environment. 

    This article highlights how businesses operating in our past slash and trash economy decided they would bring the environment to where they wanted to grow food, which happens to be in a desert.  Under environmental economics, you grow food where there are already sufficient natural resources to support the business. 

    When mother nature removes or reduces a resource it has a tremendous negative impact upon a slash and trash economy. 

    Playing Dirty in the War for Water

    • January 26, 2016

    I am a farmer’s daughter. I grew up checking sprinklers and changing irrigation with my dad in a pair of muddy boots. The experience afforded me an intimate awareness of the importance of having affordable water to nourish one’s crops. My family still farms in California, and as my last name indicates, our heritage is Hispanic. Which is why I find this story especially upsetting.

    With poignant slogans and gripping imagery, an organization called “El Agua Es Asunto de Todos”—Water is Everybody’s Business—has demanded more water for the San Joaquin Valley. In video testimonials on the group’s website, Hispanic community members share stories of the valley’s once-productive fields as well as the suffering they experience now from lack of work. They discuss school closures, poverty, and loss of homes. The organization’s website reads: “No water. No work. No economy,” and, “Water is the key to our future. And the future is in our hands.”

    The group’s message is a valid one. Without water there are no fields and therefore fewer jobs. But its message also strikes me as disingenuous. While El Agua operates under the guise of a grassroots Latino community effort, as the New York Times reported in December, it is funded entirely by Westlands Water District.

    To be clear, nowhere on El Agua’s website could I find mention that the organization is bankrolled by Westlands. Nor could I find any statistic or reference to water availability and usage. Instead, its pages are filled with emotionally charged language and victimized pleas. “It’s a disaster,” one testimonial reads. “We’re going to lose everything we have.” But the fact is, that the group’s participants—presumably innocent, well-meaning people—are being played. And their heart-wrenching village campaign is, in reality, a thirsty wolf in sheep’s clothing.

    Westlands Water District is not your average water district. According to the New York Timesarticle, it supports about 600 large-scale farmers within a 600,000-acre stretch of land in California’s San Joaquin Valley. As the Times reports, it’s a $100 million-a-year agency and a powerful political force, with a litigious past and five lobbying firms under contract in Washington and Sacramento, all with one objective: to get its hands on inexpensive water.

    The New York Times reports that for decades a federal water management organization called the Central Valley Project offered farmers in California’s San Joaquin Valley an abundance of affordable water that it gathered in northern California and piped south via 500 miles of canals. Farmers within the district received a triple subsidy—cheap water, USDA crop subsidies, and below-market electricity. However, in the 1970s, the State Water Project created a second canal system and diverted some of the same water from the northern Californian source rivers.

    As you can imagine, devastating environmental problems emerged. Commercial salmon fisheries collapsed. At the confluence of the Sacramento and San Joaquin Rivers, fish populations declined dramatically. Congress’s solution was a law reserving at least a minimum amount of water for wildlife. Not surprisingly, it hit a nerve with farmers in the San Joaquin Valley. El Agua represents one facet of Westlands’ many efforts to access more federal water.

    Since then, Westlands has lobbied for new reservoirs to augment Central Valley Project reserves, according the New York Times. It has pleaded that water scarcity will ruin the lives of the district’s Latino population. Purchasing water at inflated prices from other sources would reduce agricultural profits and threaten farmers’ bottom line with ruinous results. The New York Times reports that Westlands is currently working to persuade Congress to loosen the rules that set aside Sacramento basin water for fisheries. And it will stop at nothing to get the federal tap turned back on.

    In a heartfelt message on El Agua’s website, general director Martha Elvia Rosas writes, “When we suffer water restrictions, all of us are affected. However the Hispanic community is especially vulnerable. We lose our jobs and our businesses. Furthermore, we lose educational opportunities for our children and, in general, our entire future is put at risk.” This statement, while partially true, leaves out the fact that Westlands has the power to change the current circumstances, or any role in the issue’s resolution for that matter.

    El agua es absolutamente asunto de todos. I couldn’t agree more. Water rights are indeed everyone’s business. And I wholeheartedly support an honest discussion of facts between farmers, politicians, and the Hispanic community. But manipulative tactics and self-serving slogans? That just seems sinister.

    I welcome your thoughts.

     

  • Environmental Liabilities After A Fire

    fire

    12/29/15 – By Chris Bunbury

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

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

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

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

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

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

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