Environmental Exposures Created By Loading Docks

Loading-DockEnvironmental liabilities generally take place over long periods of time. A perfect example of this are loading docks. Some of the contaminants that come off trucks using loading docks are lead; cadmium; asbestos; anti-freeze; petroleum products; hydraulic fluids; release of fluids from loading dock levelers; loading & unloading of cargo…. Loading docks that are not maintained like in the picture above allow these contaminates to seep into the ground and spread via ground water, vapor intrusion or storm water runoff and can create environmental liabilities for the property owners.

Companies with loading docks need to have a loading dock management program that maintains the integrity of the dock while capturing contaminants so over time they do not create an environmental liability.

Real estate owners that lease out facilities with loading docks should include in their lease the tenant is responsible for maintaining the integrity of loading docks including an overview of what is expected in maintaining the integrity. Tenants should also be responsible to provide timely notification of environmental concerns related not only to the loading docks but the leased premises to the real estate owners.

environmental Strategist™ (eS) go one step further and feel the tenant should at a minimum, annually send to the property owner a signed document they have maintained the leased premises free of environmental liabilities. The reason you do this is because as the property owner you are ultimately responsible for the environmental condition of your property regardless of who caused the environmental liability. With the tenant environmental sign off report you are at a minimum building your defense should the tenant cause an environmental liability and you get dragged in as the real estate owner.

What is a pollutant?

environmental Strategist describes a pollutant as a material, substance or product introduced to an environment for other than its intended use or purpose.

We have examples of fresh water, milk, cheese, fruit juice, beer… all being classified as pollutants. As the link below points you can add Molasses to the list of pollutants.

In today’s transparent business environment, successful businesses balance managing and transferring their environmental exposures to drive their growth and profits. environmental Strategist in conjunction with Environmental Risk Managers (ERMI) has a cornucopia of educational resources to coach you and your client’s on managing and transferring their environmental exposures.

Matson settles Hawaii’s claims over molasses spill for $15M

environmental Strategist, between the lines: Lead

Some of the products you may be using today that contain lead are chocolate, cosmetics, computers and other electronics, construction trade materials, batteries, keels of boats, car and truck tires….

  • Production and use of lead is growing worldwide.
  • Roughly 10 million tons are produced annually with half of that coming from recycling.
  • Lead is usually found in ore with zinc, silver and most abundantly in copper.
  • The United States is one of the world’s top producers of lead.
  • At the current rate of use it’s predicted that lead will run out in just under forty years.

After reading about a lead issue California is dealing with it should become pretty clear that lead is a huge environmental exposure most people do not think about.

Lead Removal Could be California’s Biggest Yet


By: Chris Bunbury, eS
Environmental Risk Managers, Inc.

Why has environmental risk management and insurance become part of “Best Practices” for commercial insurance professionals? The simple answer, every business is impacted by environmental exposures.

The reality, in today’s transparent business environment, managing and transferring environmental exposures has become a critical risk management component that can drive a business’s growth and profits. In the process, those insurance professionals making environmental risk management and insurance part of “Best Practices” become a trusted advisor and team member with insureds.

So how do fire insurance policies fit in? First we need to ask, why do commercial insurance professionals sell fire insurance policies to clients?

  • The financial institution holding the note on their property requires it?
  • The property owner can’t afford to self-insure against the peril of fire so the economies of scale make business sense to purchase a fire policy?
  • It’s included in their BOP?
  • It’s what you have always done as an insurance professional?…

Does the fire policy help the insured? Yes, but what happens when a fire occurs?

A fire occurs and the fire department puts out the fire. Now in the aftermath the water and chemicals used by the fire department and the burned contents of the building mix together and creates a pollution liability. The fire department is immune from prosecution but under Federal law the property owner is ultimately responsible for the environmental condition of their property.

So any business with a fire policy, that experiences a fire, has an excellent chance of being impacted by environmental liabilities.

Example: Auto parts dealers store caught on fire. After the fire was extinguished the basement of the building contained tens of thousands of gallons of a hazardous goo. It cost the owner of the store in excess of $80,000 to dispose of the goo which was not covered by insurance. The store owner sued their insurance professionals E&O policy for coverage.

With risk management you walk a fine line between being proactive and creating unexpected consequences such as increased exposure to a new risk. Take sprinklers systems in buildings. While sprinklers suppress fires they also spread pollutants.

Let me give you another example: Aboveground Storage Tanks (AST’s) as a means to reduce risk versus Underground Storage Tanks (UST’s)? Initial reactions generally are AST’s make sense versus UST’s.


  • Are the AST’s equipped with secondary containment? If not then a leak can spread contamination faster and further than a UST.
  • Is the integrity of the secondary containment tested on a regular basis? This is what happened in a West Virginia chemical spill. The secondary containment failed causing a pollution event that deprived over 300,000 residents in nine counties access to fresh drinking water for days along with businesses, schools, municipalities…. I read one report that said local hotels were losing $1,000,000 a day. Freedom Industries the business that caused the spill in West Virginia filed for bankruptcy days after the spill.
  • Are the AST’s located where natural disasters (tornados, floods, hurricanes, earthquakes…) occur? Natural disasters can destroy the integrity of the tank releasing its contents?

I could go on and on but hopefully you now have a better understanding why environmental risk management and insurance are part of “Best Practices” for commercial insurance professionals.

Environmental Risk Management Tip: Don’t get fooled by the “limited” pollution policies offered by standard property and casualty insurance carriers. The reason insurance carriers offer “limited” pollution coverage is because it “limits” the insurance carriers exposure to environmental liabilities. “Limited” pollution policies offer “limited” benefits to the insured.

Environmental Liabilities After A Fire

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 coverages.

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.

environmental Strategist, between the lines: Environmental Economics

Have you noticed our shift toward an environmental economics (ee) platform? Probably not, but it is coming, slowly but surely.

What is ee? Our current economic platform I call our “Slash & Trash” economy. Under a Slash & Trash economy the environment is a subset under the economy. Under an ee platform the opposite is true, i.e. the economy is a subset under the environment.

The link below will share with you an excellent example of ee involving Starbucks. Due to the severe water draught in California, Starbucks has elected to utilize another facility in Pennsylvania where there is ample water for its Ethos bottled water brand. i.e. the environment is directing where Starbucks is getting its water.

Obviously Starbucks strategy is to proactively address its environmental reputational risk.

We have learned that our Slash & Trash economy is flawed and ee offers a stronger foundation which if you do not embrace ee, will be forced upon you, i.e. California water restrictions.

California drought prompts Starbucks to source its Ethos Water elsewhere


Environmental Strategist, between the lines: Abandoned Mines

There are hundreds of thousands of abandoned mines littered across the United States.

Acid Mine DrainageDo not fool yourself and think you are in the clear once you get environmental professionals involved. Below is a simple example of how even “environmental professionals” make mistakes.
As you will read below, abandoned mines can release an array of environmental contaminants which can cause third party bodily injury, third party property damage, business interruption, investigation and cleanup costs, legal fees…

This leads to the question “Who are your neighbors?” What if a neighboring property causes contamination to come onto your property and it happens to be from an old abandoned mine and there is not an identifiable responsible party? Under Federal law the property owner is responsible for the environmental condition of their property regardless of who caused the environmental problem. Pollution liability insurance can protect you from pollution liabilities caused by third parties.


Above Ground Storage Tanks (AST’s)

From contractors to agriculture, manufacturers, auto dealer and repair facilities, trucking companies, gas stations, Above Ground Storage Tanks (AST’s) are abundant if our business world.

Above-Ground-Storage-TankInitial reactions generally are AST’s make sense versus Underground Storage Tanks (UST’s). In talking with insurance professionals I will hear the insured does not really have an environmental exposure because their raw materials are stored in AST’s with secondary containment. The AST pictured above is in secondary containment. However as you and I am sure the contractor at this job site can see the integrity of the secondary containment has been compromised. It is important to annually test the integrity of an AST’s secondary containment.

More than likely if there is a release from this AST it will breach the secondary containment and allow pollutants to spread. As a side note this tank is located in an area where local residents get their potable water from wells on their property, no city water supplied.

I also point out this picture was taken after hours and there was no lock on the tank that would restrict vandals from stealing fuel or just pumping it on the ground for fun. Regardless, the owner of the tank is responsible if there is a release, even if caused by vandals.
At least this tank was placed in some type of secondary containment. I would say more times than not AST’s are just placed on the ground with no secondary containment. Farmers, like contractors will move AST’s around on their property to conserve fuel. We see claims for this after it rains and the ground the AST was placed on gets saturated and unstable allowing the tanks to tip and spill its contents.

Is an AST’s located where natural disasters (tornados, floods, hurricanes, earthquakes…) occur? Natural disasters can destroy the integrity of the tank releasing its contents?

While AST’s seem to be a better option than UST’s, when a spill does occur, the contents can spread faster and further than with a UST release.

Most states do not require financial assurance on AST’s like they do for regulated UST’s. One benefit to financial assurance is when a loss does occur there are some monies available to address the environmental liability. AST’s can easily be insured on a standalone basis or using a contractors pollution liability policy or a site pollution insurance policy.

If you are a AST owner you need to have not only a risk management strategy to reduce your exposure to loss but a financial assurance strategy for when a release occurs.

As your environmental team member Environmental Risk Managers can assist you in proactively addressing your client’s environmental exposure to storage tanks.

Toxic Release Inventory To Generate New Business

The Toxics Release Inventory (TRI) tracks the management of certain toxic chemicals that may pose a threat to human health and the environment. U.S. facilities must report annually on how much of each chemical is released to the environment and/or managed through recycling, energy recovery and treatment.
In 2014, 21,783 businesses reported their TRI use. 25.45 billion pounds of TRI chemicals were reported as managed as waste: • 37% was recycled • 14% was used for energy recovery • 34% was treated • 16% was disposed of or released
Bottom line: The government tracks TRI chemicals because they are some of the most dangerous chemicals used. Any company that uses TRI chemicals is an excellent candidate for pollution insurance because they have a pollution exposure that is serious enough the government monitors them.

Marketing Strategy

Go to http://www.epa.gov/trinationalanalysis click on view TRI data where you live and it will list for you the names and addresses of companies in your marketing area using TRI chemicals. When you call to strategize on the environmental exposures impacting their operations do not waste their time discussing standard P&C insurance because as we all know they have herd that a 1,000 times. Simply let them know you would like to meet to discuss managing and transferring their environmental exposures. Email to the company the appropriate ERMI environmental Risk Assessment (eRA) for their review so you and the company can get on the same page about the environmental exposures impacting their operations. This strategy will drive sales of not only pollution insurance but your standard P&C products.

ERMI, your team member for all things environmental.

environmental Strategist, between the lines: Vapor intrusion

Vapor intrusion is such a huge environmental exposure for property owners that ASTM the society that developed our Phase I, Phase II… site assessments developed ASTM 2600 that deals specifically with vapor intrusion. If you are a property owner you must have a strategy in place to address your exposure to vapor intrusion. Relying on the at fault party/s to make you whole is a very weak strategy.

Pollution liability insurance can protect property owners from vapor intrusion.

This article offers a nice overview on vapor intrusion: Vapor Intrusion: An Emerging Risk That Could Cost Property Owners (new window)