Tag: risk

  • Environmental Exposures Impacting High Net Worth Insureds

    In this High Net Worth (HNW) competitive environmental intelligence, we examine the article “7 Crucial Risks Facing High Net Worth Families” and have broadened it by adding the environmental exposures (bold below) that are part of the 7 crucial risks facing HNW insureds.

    As the article highlights:  High net worth (HNW) individuals and families face many risks due to their complex lifestyles. The wealth they have accumulated makes their property and casualty exposures more complex than the average consumer, and their risks oftentimes rival those of a business in scope.

    The frequency and complexity of the risk exposures faced by HNW families and individuals make it necessary to adopt proactive risk prevention strategies, as well as the purchase of insurance protection to make them whole should they suffer a loss.

    The ERMI, Patent Pending, HNW Pollution Insurance Program is designed to protect your HNW insureds from the environmental exposures impacting their resources while better protecting your E&O exposure.

    If you are not assisting your HNW insureds on managing and transferring their environmental exposures, the only coverage they may have when they experience an environmental liability is your E&O insurance.

    7 Crucial Risks Facing High Net Worth Families

    From cyber risks to global travel, high net worth families have a host of risks to manage.

    By: Lisa Lindsay | June 26, 2018 • 3 min read

    High net worth (HNW) individuals and families face many risks due to their complex lifestyles. The wealth they have accumulated makes their property and casualty exposures more complex than the average consumer, and their risks oftentimes rival those of a business in scope.

    The frequency and complexity of the risk exposures faced by HNW families and individuals make it necessary to adopt proactive risk prevention strategies, as well as the purchase of insurance protection to make them whole should they suffer a loss.

    1) Cyber Crime

    The use of technology and social media, the number of connected devices per household and the number of people (staff, advisers) communicating with HNW individuals make them prime targets for cyber crimes.

    These crimes include email phishing, ransomware and unauthorized bank transfers. While the insurance industry is starting to offer insurance protection for some of these losses, the best defense is practicing good cyber hygiene.

    2) Catastrophic Weather Losses

    Hurricanes, flooding and wildfires will continue to impact HNW families since many of them own homes in disaster-prone tropical or mountainous regions.

    Traditional risk identification tools such as FEMA flood maps are outdated and do not accurately reflect risk. In recent years, we’ve seen unprecedented flooding in areas that have never or rarely been flooded before. These extreme weather events will continue to impact the HNW.

    To prevent losses, families and individuals must work with professionals who can provide more advanced risk identification resources, as well as resources to help prevent or mitigate losses, such as hurricane and wildfire protective services.

    HNW insured’s with assets located where natural disasters occur must have a financial assurance strategy to address the pollution liabilities created by Natural Disasters.  The ERMI HNW Pollution Program covers pollution liabilities from natural disasters or acts of God.  ERMI has more information on pollution liabilities associated with Natural Disasters.  Please contact us for more on this subject.

    3) Collections Management

    HNW families and individuals are known to have a passion for collections, such as art, furniture, memorabilia and cars. Many collections are a significant asset class in their financial portfolio and are managed aggressively to increase value, which may mean the collection is on exhibition or on loan to museums and galleries.

    This increase in risk exposures requires specialized risk management solutions.

    A good example of how specialized risk management solutions comes into play took place after the California mudslides — coverage was afforded for some who had specialized fine art insurance versus traditional homeowners’ coverage where mudslides are not typically covered.

    Collectables such as automobiles, boats, aircraft… have a variety of environmental exposures associated with their use, maintenance and storage.

    Example:  It was never determined how a yacht at a marina caught on fire.  Because of the fire, neighboring boats also caught on fire.  Fire departments responded to the fires and after the fires were put out the resulting environmental damage cost the yacht owner more than $2,000,000 in fines, penalties, cleanup, business interruption….

    4) Employee-Related Risks

    HNW families hire employees who help run their households. These individuals range from nannies, caretakers, captains and crew, to housekeepers and assistants.

    Employees bring about risk exposures related to on-the-job injuries and employment practices liability exposures. HNW individuals need to adopt the same stringent hiring practices that a business adopts when hiring and terminating employees.

    Practices should include background checks, onboarding protocols, regular performance reviews and the like.

    Employees (landscapers, janitorial, boat captains, aircraft pilots, contractors…) can and do create environmental liabilities for HNW insured’s.

    Example:  An English speaking but not English reading employee accidentally mixed non-compatible chemicals for cleaning.  The fumes from the chemicals forced the evacuation of all the building tenants while decontamination took place.  Third party bodily injury, property damage and business interruption claims against the HNW building owner exceeded $1,000,000.

    5) Security Risks

    Security at home and during travel — including the risks of terrorism and global conflict — also remains a top concern.

    Security concerns can range from home security alarms and devices to worldwide travels concerns.

    For families with complex risk exposures, consulting with a security expert is recommended. These experts provide a full risk assessment that would minimize any security breach, such as a home invasion, a cyber breach or any other issue that could put the family at risk.

    HNW individuals are targets of vandals.  Vandals can and have created environmental liabilities while carrying out their crimes.  Under federal law, you are responsible for the environmental condition of your property regardless of who caused the environmental liabilities.  The ERMI HNW Pollution Program can protect insureds from environmental liabilities caused by vandals.  Terrorism coverage is also available with the ERMI HNW Pollution Program.

    6) Professional Liability

    Many HNW individuals hold board positions on for-profit, nonprofit and not-for-profit boards, yet the majority of individuals do not know if they’re protected with professional liability coverage.

    If they know coverage is provided, the majority do not know the policy limits or terms and conditions. It is imperative that anyone who holds a board position understands their personal risk exposures and the insurance protection available to them.

    7) Ownership of Assets

    HNW individuals tend to own assets in the names of trusts, LLC and other legal entities. It is critical that they understand the ownership structures of all assets and that all insurance policies are coordinated to properly cover all necessary policies. 

    Simply due to their ownership of assets, HNW insureds are impacted by a cornucopia of environmental exposures such as, Pollution from neighboring properties migrating onto yours;  Real estate tenants using or storing environmentally sensitive materials, chemicals, waste….;  Mold;  Real estate with historical environmental problems;  New Construction and remodeling;  Air craft, auto, water craft storage / use / maintenance;   Privately owned businesses with environmental exposures due to operations or products produced (i.e. golf courses, agricultural / ranching, manufacturing, hotels / resorts, auto dealer and repair facilities, marinas…);  Vendors such as contractors (i.e. HVAC, electrical, plumbing, painting, septic), domestic help, landscapers / maintenance, pool cleaning / maintenance, caterers, boat captains, aircraft pilots…);  Storm water runoff;  Leaks from elevator hydraulic fluid storage tanks;  Impacting sensitive areas such as wetlands or endangered species;  Natural resource damages;   Sick building syndrome;  Above ground or underground storage tanks;  Adverse reactions and interactions of chemical compounds that accidentally commingle during a fire;  Farm/garden/lawn fertilizers, herbicides, pesticides…;  Easements (utilities, oil, gas…) that cross your property which may leak or spill hazardous materials;  Fuel for backup power generators;  Asbestos; Lead;  Vandalism;  Vapor intrusion….

  • Environmental Exposures Impacting High Net Worth Insureds

    In this High Net Worth (HNW) competitive environmental intelligence, we examine the article “7 Crucial Risks Facing High Net Worth Families” and have broadened it by adding the environmental exposures (bold below) that are part of the 7 crucial risks facing HNW insureds.

    As the article highlights:  High net worth (HNW) individuals and families face many risks due to their complex lifestyles. The wealth they have accumulated makes their property and casualty exposures more complex than the average consumer, and their risks oftentimes rival those of a business in scope.

    The frequency and complexity of the risk exposures faced by HNW families and individuals make it necessary to adopt proactive risk prevention strategies, as well as the purchase of insurance protection to make them whole should they suffer a loss.

    The ERMI, Patent Pending, HNW Pollution Insurance Program is designed to protect your HNW insureds from the environmental exposures impacting their resources while better protecting your E&O exposure.

    If you are not assisting your HNW insureds on managing and transferring their environmental exposures, the only coverage they may have when they experience an environmental liability is your E&O insurance.

    7 Crucial Risks Facing High Net Worth Families

    From cyber risks to global travel, high net worth families have a host of risks to manage.

    By: Lisa Lindsay | June 26, 2018 • 3 min read

    High net worth (HNW) individuals and families face many risks due to their complex lifestyles. The wealth they have accumulated makes their property and casualty exposures more complex than the average consumer, and their risks oftentimes rival those of a business in scope.

    The frequency and complexity of the risk exposures faced by HNW families and individuals make it necessary to adopt proactive risk prevention strategies, as well as the purchase of insurance protection to make them whole should they suffer a loss.

    1) Cyber Crime

    The use of technology and social media, the number of connected devices per household and the number of people (staff, advisers) communicating with HNW individuals make them prime targets for cyber crimes.

    These crimes include email phishing, ransomware and unauthorized bank transfers. While the insurance industry is starting to offer insurance protection for some of these losses, the best defense is practicing good cyber hygiene.

    2) Catastrophic Weather Losses

    Hurricanes, flooding and wildfires will continue to impact HNW families since many of them own homes in disaster-prone tropical or mountainous regions.

    Traditional risk identification tools such as FEMA flood maps are outdated and do not accurately reflect risk. In recent years, we’ve seen unprecedented flooding in areas that have never or rarely been flooded before. These extreme weather events will continue to impact the HNW.

    To prevent losses, families and individuals must work with professionals who can provide more advanced risk identification resources, as well as resources to help prevent or mitigate losses, such as hurricane and wildfire protective services.

    HNW insured’s with assets located where natural disasters occur must have a financial assurance strategy to address the pollution liabilities created by Natural Disasters.  The ERMI HNW Pollution Program covers pollution liabilities from natural disasters or acts of God.  ERMI has more information on pollution liabilities associated with Natural Disasters.  Please contact us for more on this subject.

    3) Collections Management

    HNW families and individuals are known to have a passion for collections, such as art, furniture, memorabilia and cars. Many collections are a significant asset class in their financial portfolio and are managed aggressively to increase value, which may mean the collection is on exhibition or on loan to museums and galleries.

    This increase in risk exposures requires specialized risk management solutions.

    A good example of how specialized risk management solutions comes into play took place after the California mudslides — coverage was afforded for some who had specialized fine art insurance versus traditional homeowners’ coverage where mudslides are not typically covered.

    Collectables such as automobiles, boats, aircraft… have a variety of environmental exposures associated with their use, maintenance and storage.

    Example:  It was never determined how a yacht at a marina caught on fire.  Because of the fire, neighboring boats also caught on fire.  Fire departments responded to the fires and after the fires were put out the resulting environmental damage cost the yacht owner more than $2,000,000 in fines, penalties, cleanup, business interruption….

    4) Employee-Related Risks

    HNW families hire employees who help run their households. These individuals range from nannies, caretakers, captains and crew, to housekeepers and assistants.

    Employees bring about risk exposures related to on-the-job injuries and employment practices liability exposures. HNW individuals need to adopt the same stringent hiring practices that a business adopts when hiring and terminating employees.

    Practices should include background checks, onboarding protocols, regular performance reviews and the like.

    Employees (landscapers, janitorial, boat captains, aircraft pilots, contractors…) can and do create environmental liabilities for HNW insured’s.

    Example:  An English speaking but not English reading employee accidentally mixed non-compatible chemicals for cleaning.  The fumes from the chemicals forced the evacuation of all the building tenants while decontamination took place.  Third party bodily injury, property damage and business interruption claims against the HNW building owner exceeded $1,000,000.

    5) Security Risks

    Security at home and during travel — including the risks of terrorism and global conflict — also remains a top concern.

    Security concerns can range from home security alarms and devices to worldwide travels concerns.

    For families with complex risk exposures, consulting with a security expert is recommended. These experts provide a full risk assessment that would minimize any security breach, such as a home invasion, a cyber breach or any other issue that could put the family at risk.

    HNW individuals are targets of vandals.  Vandals can and have created environmental liabilities while carrying out their crimes.  Under federal law, you are responsible for the environmental condition of your property regardless of who caused the environmental liabilities.  The ERMI HNW Pollution Program can protect insureds from environmental liabilities caused by vandals.  Terrorism coverage is also available with the ERMI HNW Pollution Program.

    6) Professional Liability

    Many HNW individuals hold board positions on for-profit, nonprofit and not-for-profit boards, yet the majority of individuals do not know if they’re protected with professional liability coverage.

    If they know coverage is provided, the majority do not know the policy limits or terms and conditions. It is imperative that anyone who holds a board position understands their personal risk exposures and the insurance protection available to them.

    7) Ownership of Assets

    HNW individuals tend to own assets in the names of trusts, LLC and other legal entities. It is critical that they understand the ownership structures of all assets and that all insurance policies are coordinated to properly cover all necessary policies. 

    Simply due to their ownership of assets, HNW insureds are impacted by a cornucopia of environmental exposures such as, Pollution from neighboring properties migrating onto yours;  Real estate tenants using or storing environmentally sensitive materials, chemicals, waste….;  Mold;  Real estate with historical environmental problems;  New Construction and remodeling;  Air craft, auto, water craft storage / use / maintenance;   Privately owned businesses with environmental exposures due to operations or products produced (i.e. golf courses, agricultural / ranching, manufacturing, hotels / resorts, auto dealer and repair facilities, marinas…);  Vendors such as contractors (i.e. HVAC, electrical, plumbing, painting, septic), domestic help, landscapers / maintenance, pool cleaning / maintenance, caterers, boat captains, aircraft pilots…);  Storm water runoff;  Leaks from elevator hydraulic fluid storage tanks;  Impacting sensitive areas such as wetlands or endangered species;  Natural resource damages;   Sick building syndrome;  Above ground or underground storage tanks;  Adverse reactions and interactions of chemical compounds that accidentally commingle during a fire;  Farm/garden/lawn fertilizers, herbicides, pesticides…;  Easements (utilities, oil, gas…) that cross your property which may leak or spill hazardous materials;  Fuel for backup power generators;  Asbestos; Lead;  Vandalism;  Vapor intrusion….

  • 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

  • TEAMing with Electrical Contractors

    Continuing with our environmental risk management series for contractors, you will find attached an environmental Risk Assessment (eRA) for Electrical Contractors.

    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.

    What is a Pollutant?

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances.

    Many non-environmental contractors 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 contractors exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Electric Contractors

    May include, but are not limited to; Vapor intrusion;  Lead;  Asbestos;  Mold;  Storm water runoff;  Impacting underground utilities;  Spills from mobile storage tanks;  Ground water contamination;  Puncturing unknown underground storage tanks;  Silica;  No auditing of waste handling and disposal companies;  Natural resource damages;  Defense costs for nuisance claims;  Electrical failure that leads to a pollution loss;  and more…

    Environmental Loss Examples

    1. While installing new overhead electrical lines, an electrical contractor had a subcontractor sinking the new utility poles. The subcontractor hit an underground sewer line with an auger spilling sewage into a neighboring stream. Through contractual liability, the electrical contractor was responsible for the actions of the subcontractor. Cleanup of spilled sewage and repair of the sewer line was in excess of $175,000.
    2. An electrical contractor removed ductwork from a hospital’s HVAC system. It was later determined that the ductwork was home to a dangerous fungus. The dismantling activities and the on-site storage of dismantled ductwork caused the fungus to spread into the hospital. Patients became infected with the fungus; some were even critically infected. The contractor was found liable for the spread to the fungus and faced bodily injury and property damage claims in excess of $1 million.
    3. An electrical control panel error recorded an open valve as closed resulted in a release of thousands of pounds of chlorine gas into the atmosphere. The leak was detected only after several employees and local residents became ill. These same employees and residents later filed claims against both the facility and the electrical contractor that performed the installation. Total cost of the claim forced the contractor to file bankruptcy, and eventually put them out of business.
    4. While working on a historical property, an electrical contractor used a hole saw to cut through a wall. Unknown to the contractor, the saw inadvertently disturbed and released asbestos-containing insulation material. The contractor had to pay cleanup costs for the asbestos fibers released throughout the building, costing in excess of $40,000.
    5. An electrical contractor upgraded the odor control equipment at a poultry plant. However, the upgrades were performed incorrectly, which resulted in total failure of the odor control unit. Neighbors filed claims alleging Bodily Injury and diminution of Property Value. In the end, the electrical contractor had to re-do the job, costing them additional time, labor, and parts for which they received no compensation.
    6. A utility contractor had to pay cleanup costs and business interruption expenses in excess of $500,000 when they ruptured and unmarked petroleum pipeline.
    7. An electrical contractor was using an aboveground storage tank (AST) to store gasoline for his trucks and equipment. One morning, they discovered that vandals had shot a hole in the tank, releasing thousands of gallons of gasoline from the AST. This spill was the subject of a Government-mandated excavation and disposal of the contaminated soils. Cost of the cleanup exceeded $75,000.

    Overlooked Benefits of Environmental Liability Insurance

    Because environmental losses are a severity risk, rather than a frequency risk, the majority of Electrical contractors lack the financial strength to self-insure their potential environmental liabilities. Since every Electrical 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.

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often times the clean-up costs are far less than other costs that often arise from the loss.

    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.

    CPL can be offered on a claims made or occurrence basis.  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.

    Contractors 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.

    Environmental Impairment Liability (EIL)

    EIL is for contractors that own, rent, lease, operate or have any other insurable interest in real property (a fixed site facility such as a shop, batch plants, cement manufacturing/mixing plant….) 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.

    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.

    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?

    ERMI, so much more than a wholesaler, we are your TEAM member for all things environmental.

  • 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

  • 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

  • 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.