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Environmental Impairment Liability (Pollution)

Environmental risks are complex and require specialized expertise and specialized coverage.

At Benson Kearley IFG, we work with you to make sure you understand what environmental impairment liability coverage is right for your business.

DIRECT AND INDIRECT COSTS OF ENVIRONMENTAL RISKS
  • Third-Party Bodily Injury and/or Property Damage
  • Sudden and Accidental Events
  • Gradual Events
  • Post Disaster Losses
  • Indoor Environmental Quality (IEQ)
  • Remediation Costs: clean up, test for, monitor, remove contain, treat,
  • detoxify, decontaminate, stabilize, remediate, or neutralize
  • Proper Disposal of Wastes
  • Business Interruption
  • Diminution of Property Values
  • Fines & Penalties
  • Reputation
SOURCES OF RISK:
  • Premises & Operations
  • Products and Completed Operations
  • Off-site work
  • Transit
  • Waste Handling
WHO IS AT RISK?:
  • Corporations
  • Directors & Officers
  • Managers
  • Employees
  • Lending Institutions
  • Previous Land Owners
THE LEGAL LANDSCAPE

Statutory Liabilities of Directors & Officers

Federal

  • Canadian Environmental Protection Act (CEPA)
  • Transportation of Dangerous Goods Act
  • Fisheries Act
  • Canadian Business Corporation Act (CBCA)

Ontario

  • Environmental Protection Act (EPA)
  • Ontario Water Resources Act
  • Pesticides Act
  • Dangerous Goods Transportation Act
  • Ontario Business Corporations Act (OBCA)
  • Ontario Spills Bill
WHAT ARE THE CONSEQUENCES?
  • Risk of being prosecuted corporately and personally
  • Legal expenses in defending an action
  • Fines
  • Lost business due to bad publicity
  • Jail
ENVIRONMENTAL RISK MANAGEMENT RESPONSES
  • Loss Control: Due Diligence
  • Traditional Insurance: What’s covered, what’s not?
  • Specialized Environmental Insurance Coverages
LOSS CONTROL: What is due diligence?
  • Compliance with all prescribed environmental regulations, standards and guidelines
  • Appointment of an environmental affairs person with duties specific to the application of corporate policy, which duties include regular reports to senior officers and the Board of Directors
  • Implementation of environmental control practices including any improvements which might be required to existing systems
  • Provide staff training and education programs as necessary to assist in the application of corporate policy
  • Establish a program of environmental monitoring and record keeping
  • Establish and implement a program for emergency response measures
TRADITIONAL PROPERTY (1ST PARTY) INSURANCE GAPS

The Commercial Building, Equipment & Stock ( Broad Form )

The Pollution Exclusion…

The Effects:

1) loss or damage caused by pollutants

2) cost of clean up

Exceptions (2): Limited Coverage Write Back (Named Perils versus Broad form)

Property Floaters: Exhibition, Installation, Tool, Contractors Equipment same exclusions

Transit:

Fungi and Fungal Derivatives Exclusion

Equipment Breakdown:

Business Interruption: following form terms, conditions of general property and equipment breakdown form

Filling The Gap

Land & Water Pollution Clean Up : ( Extension to Property Wording)

Specialized Environmental Liability coverage

  • On-Site Clean – Up Coverage (Scheduled Locations)
  • Sudden and Gradual on Site Property Losses
TRADITIONAL 3RD PARTY COVERAGE: The Commercial General Liability Policy
  • Premises exposures
  • Waste handling
  • Offsite exposures
  • Clean up costs
  • Hostile Fire
  • Pollutants definition
  • Occurrence trigger

Exclusions:

  • Pollution
  • Asbestos
  • Fungi and Fungal Derivatives (Mould) Exclusion

Endorsement Forms:

  • Limited Pollution Coverage
  • Absolute / Total Pollution Exclusion

Pollution Event Liability Insurance

  • 3rd Party Liability; Bodily Injury / Property Damage / Clean up costs for sudden
  • events only 120 or 240 hours.
  • Pollution Incident Defined
  • Coverage for waste
  • Government ordered clean up
  • On-site cleanup costs
  • Transportation risks covered including loading and unloading

Environmental Impairment Liability Insurance

  • Gradual pollution events including historical hazards
  • Scheduled Premises including the Blanket basis for contractors, waste management

and commercial premises risks

Contractors PEI /EIL

  • The cover may be written to include all the contractor’s activities on a blanket basis, not just scheduled locations.
  • The cover may be written on a single-job basis, for owner’s interest, contractor’s
  • interest or full wrap-up form.
  • Underground tank installers or site remediation and decontamination projects, either on an annual or individual-job basis.
  • Work on or near waste management sites such as waste dumps or storage depots presents unusual hazards for contractors and other service providers. The standard CGL policy provides reduced cover for work on or around such sites. A specialty policy may be necessary for such work.
  • The policy can include completed operations, if not provided by the CGL policy.

*These coverage descriptions are for illustration purposes only. For full  particulars, recourse must be made the actual policy wordings.

Connect with Benson Kearley IFG to learn more about Environmental Impairment Liability (Pollution).