What is a pollutant? If you look at an insurance policy they will define a pollutant as smoke, soot, vapors, fumes, acids… I am not a scientist and so the definition of a pollutant we use at ERMI is “A material, substance or product that gets introduced into an environment for other than its intended use or purpose.” In the past fresh water, cheese and milk have been classified as pollutants by insurance companies that have
denied coverage for liability claims field regarding these materials being introduced into an environment for other their intended use or purpose.
Below is another pollutant, cheese whey that I recently found on a Blog. This loss example also involves storm water runoff. Storm water runoff is a big exposure for any clients you have that own property where it can rain or snow. If you do not think storm water runoff is a big issue just look to Wal-Mart and Home Depot who were hit with multi-million dollar fines for storm water runoff from their construction sites.
Cheese Whey as a Pollutant: Cheese whey is a byproduct of making cheese and is a known and used fertilizer for crops. So there is no way it could be a REC (Reportable Environmental Condition) per ASTM. However it proved to be a costly liability for one farmer.
A client spread his cheese whey as a fertilizer to his crops too early in upstate NY in March when the ground was still frozen. The rain drained the cheese whey into neighboring property owners drinking wells. They drank the water, now contaminated with cheese whey and bacteria from the cheese whey, and got ill. They sued for bodily injury.
The farmer turned to his general liability insurer for coverage – because certainly a product specifically used as a non-toxic fertilizer was not a “pollutant.” In fact cheese whey is in Doritos!
The insurance carrier denied the claim citing that cheese whey was a “pollutant” as defined by the Pollution Exclusion under his general liability policy.
There are more risks and liabilities facing our clients that a Phase I will not “catch” or “protect” against and can be in the form of a common every day used ‘harmless,’ in fact beneficial byproduct/product.
ERMI, so much more than just a wholesaler!