environmental Strategist, between the lines: The majority of insureds and for that matter, insurance professionals, think about pollution policies offering coverage to clean up a pollution liability. While that is true, I do not believe cleanup is one of the top three benefits offered in pollution policies.
Pollution Liability Insurance Policy Benefit #1: Defense coverage. Environmental liabilities are relatively new and can be very litigious. Dealing with governmental regulation / penalties along with suits from injured third parties can be very litigious and pollution insurance policies offer defense coverage. Even if you do nothing wrong you can still get named in a lawsuit. Example, a subcontractor on a job causes a pollution liability. The sub gets named in the suit along with the general contractor and property owner. Even though the general contractor and property owner did not cause the liability they still get named in the suit and the attorneys will let the courts decide who should pay and who can be released. When reading the link below pay attention to all the various suits that are initiated due to a spill of oil from a tanker truck.
Pollution Liability Insurance Policy Benefit #2: When a pollution liability occurs, you can have the Federal, state and local governments pounding on your door along with the press and neighbors. A pollution liability is not a fender bender, a pollution liability requires specialists who know how to run damage control central and included in the premium paid, all pollution policies come with specialists to assist in handling an environmental claim. When reading the link below pay attention to all the parties involved and trying to communicate and coordinate if you have never been involved in a pollution liability can be overwhelming if not impossible to manage.
Pollution Liability Insurance Policy Benefit #3: Most of the time the cost to clean up the environmental liability is less than claims that come in from third parties for Bodily Injury, Property Damage and what I call the big “Black Hole” Third Party Business Income. As you read the link below notice all the third parties impacted the oil spill. They define business income and who will receive what along with other third-party damages. When we work with a Fortune 500 company, the main environmental liability they are concerned with is third party bodily injury. Most of the time they will self-fund for cleanup costs cause in their minds, remediation is the least of their worries in dealing with pollution liabilities.
Now we get to pollution policy benefit #4: Cleanup
Pollution policies offer a lot more benefits than those listed above. Bottom line, every business is impacted by environmental exposures and in the United States 95% of the business can’t afford to self-insure. As your client’s professional risk manager, it is our job to make sure you have an environmental financial assurance plan in place. What environmental financial assurance plan do you have in place for your commercial and High Net Worth insured?
When you read the link below pay attention to the date of the loss and when it’s is finally getting to settlement discussions. With pollution insurance you get made whole and then the insurance companies will subrogate against the at fault parties.