{"id":2654,"date":"2022-05-09T16:25:59","date_gmt":"2022-05-09T16:25:59","guid":{"rendered":"http:\/\/estrategist.com\/website\/members\/?p=2654"},"modified":"2022-05-09T16:25:59","modified_gmt":"2022-05-09T16:25:59","slug":"commercial-livestock-operations","status":"publish","type":"post","link":"https:\/\/estrategist.com\/members\/commercial-livestock-operations\/","title":{"rendered":"Commercial Livestock Operations"},"content":{"rendered":"

What is a Pollutant?\u00a0<\/span><\/p>\n

Any material, substance, liquid, product\u2026 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.\u00a0<\/span><\/p>\n

Commercial livestock operations should be aware that pollutants (such as manure, herbicides, fertilizer, etc.) are excluded from coverage on most GL policies. And GL policies that do provide pollution coverage typically do so on a limited basis, with inadequate limits and\/or strict discovery and reporting requirements for there to be coverage. In the event of a pollution loss at one of your properties, does your insurance provide adequate coverage?\u00a0<\/span><\/p>\n

Environmental Exposures Impacting Commercial Livestock Operations<\/strong><\/p>\n

Include, but are not limited to<\/b>; Storage, use and disposal of fertilizers, pesticides (Glyphosate), and herbicides;\u00a0 Animal waste management;\u00a0 Disposal of liquid wastes in septic or leach systems;\u00a0 Storage of fuels, antifreeze, oil and hydraulic fluids;\u00a0 Leaking above and\/or underground storage tanks;\u00a0 Air emissions from chemical applications and animal waste;\u00a0 Storm water runoff; Vapor intrusion;\u00a0 Spills from loading and unloading of farm equipment and supplies;\u00a0 Faulty refrigeration units;\u00a0 Overuse of irrigation;\u00a0 On-site disposal of trash, garbage and other waste materials;\u00a0 Old equipment storage yards; On-site compost piles, Wastewater lagoons or injection wells;\u00a0 Historical contamination;\u00a0 Natural resource damages;\u00a0 Old or abandoned wells not properly closed allowing contamination into the soil and ground water;\u00a0 Improper management of protected or sensitive areas like wetlands;\u00a0 Vandalism;\u00a0 Easements on the property (rail\/roadways, pipelines, power lines, waterways) with potential environmental implications;\u00a0 Uncontained floor drains;\u00a0 In-ground sumps and pits;\u00a0 Inadequate or no auditing of hazardous and non-hazardous waste handlers;\u00a0 Spills and \/ or air emissions from emergency power generator systems;\u00a0 Adverse reactions and interactions of chemical compounds that accidentally commingle during a fire;\u00a0 Siltation of nearby streams from improper erosion control management; Silica;\u00a0 Pollution cleanup and liabilities that occur after a fire is put out\u2026.<\/span><\/p>\n

Environmental Claim Scenarios<\/strong><\/p>\n

    \n
  1. During an unusually heavy rainstorm, the wall of a farms on site lagoon used to treat pig wastes collapsed.\u00a0 More than 150,000 gallons of fecal waste flowed offsite, onto neighboring properties and into a river.\u00a0 Waste cleanup costs exceeded $350,000, while third party damage claims exceeded $75,000.<\/span><\/li>\n
  2. A property owner had his drinking water well tested prior to selling his land.\u00a0 Testing revealed that the well contained an alarmingly high concentration of total petroleum hydrocarbons, further investigation revealed that the source of the contamination were several dozen drums of waste oil and maintenance fluids buried on a neighboring farm.\u00a0 Though the drums were buried by the previous farm owner, the current owner was nevertheless responsible for disposal of the drums, soil and groundwater cleanup, and bodily injury and property damage claims submitted by the neighboring property owner.\u00a0 Total cost exceeded $1,000,000 and caused the farmers bankruptcy.<\/span><\/li>\n
  3. A slaughterhouse disposed of all its waste down a floor drain.\u00a0 The drain was connected to a storm sewer drain that led directly to a nearby stream.\u00a0 A fish kill occurred as a result of high biological oxygen demand in the stream.\u00a0 Under the Clean Water Act (CWA), a local environmental group filed suit for loss of the stream.\u00a0 The slaughterhouse spent $750,000 remediating the problem.<\/span><\/li>\n
  4. A dairy farmer was using treated wastewater as a fertilizer in a land application process.\u00a0 He did not comply with permitting regulations nor did he have the wastewater tested prior to application.\u00a0 After several months of application, heavy metals and high counts of e-coli were found in the soils.\u00a0 The farmer was required to pay remediation costs in excess of $265,000.<\/span><\/li>\n
  5. Over a period of several years, storm water from a livestock operation entered a nearby stream and lake.\u00a0 Due to excessive algae and bacteria in the lake, nearby residents and businesses filed claims that exceeded $2,000,000 for property damage, loss of enjoyment and perceived bodily injury.\u00a0<\/span><\/li>\n
  6. Pilgrim\u2019s Pride Corp., and three business associates were fined $500,000 by the Texas Natural Resource Conservation Commission for alleged violations of the state\u2019s air, water and waste standards.\u00a0 TNRCC found at least four alleged instances of unauthorized wastewater discharges and three alleged nuisance orders instances at two processing plants owned by the Pittsburgh, Texas based Food Company.<\/span><\/li>\n
  7. Phase I and Phase II environmental assessments involve limited sampling of a property and cannot guarantee that the property is clean. For example, a real estate limited partnership, acquired property previously used for farming on which they planned to build a mall. The firm hired a consultant to conduct a Phase I Environmental Assessment. The property was determined to be “clean.” However, when excavation for the mall began, 100 drums of buried pesticides and herbicides were unearthed. The chemicals contaminated the soil and had to be removed at the firm’s expense. Remediation and drum disposal costs exceeded $750,000\u00a0<\/span><\/li>\n
  8. The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils and required costly excavation and removal. The total cost for investigation, removal and disposal exceeded $320,000.\u00a0\u00a0<\/span><\/li>\n
  9. While transporting manure over the road, the drive got into an accident, causing the load spill from the into a nearby stream. Costs for investigation, remediation, & natural resource damages were in excess of $150,000.\u00a0<\/span><\/li>\n<\/ol>\n

    Overlooked Benefits of Environmental Liability Insurance<\/strong><\/p>\n

    Unlike most liability exposures impacting commercial livestock operations, pollution losses tend to be a severity versus frequency risk. Because all commercial livestock operations face notable environmental exposures, consideration needs to be given to the economies of scale afforded with Environmental Liability Insurance as part of your risk transfer strategy, versus self-insurance.<\/span><\/p>\n

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often the clean-up costs are far less than other costs that can arise from the loss.\u00a0<\/span><\/p>\n

    Three Overlooked Benefits<\/b> of Environmental Liability Insurance;\u00a0\u00a0\u00a0<\/b><\/p>\n

      \n
    1. Defense Costs<\/b>:<\/b>\u00a0 Environmental liabilities are relatively new and very litigious.\u00a0 Even if you do nothing wrong you can still get named in a suit and must expense defense costs i.e. legal fees, environmental investigations, etc.\u00a0\u00a0<\/span><\/li>\n
    2. Claim Management<\/b>:<\/b>\u00a0 All policies come with specialists to assist you in handling a claim.\u00a0 Who oversees communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages\u2026.?<\/span><\/li>\n
    3. Third Party Liability<\/b>:<\/b>\u00a0 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.\u00a0 You need to look at your client\u2019s and neighbors that can be impacted if you or a sub-contractor\/vendor cause an environmental loss.\u00a0 <\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/li>\n<\/ol>\n

      Environmental Liability Insurance Products<\/span><\/h3>\n

      Environmental Impairment Liability (EIL)\u00a0<\/b><\/p>\n

      EIL is for livestock operations susceptible to economic loss caused by pollution that actually or allegedly originated from their properties.\u00a0 Sometimes referred to as pollution legal liability this coverage is for those who own, operate, lease, or have any other insurable interest in real property and\/or the operations. Coverage can be written in a variety of ways addressing unknown preexisting conditions or new conditions.\u00a0 Coverage can include third party bodily injury and property damage along with business interruption and extra expense, on and off-site cleanup costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multiyear terms.\u00a0 Most EIL policies cover above ground storage tanks.\u00a0 You can cover multiple locations on a single policy.<\/span><\/p>\n

      Transportation pollution Liability\u00a0<\/b><\/p>\n

      Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or releases of transported cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and overturn of transported cargo.\u00a0 You need to strategize on your exposure to transportation.\u00a0 How are goods received?\u00a0 FOB point of Shipment or FOB point of delivery?\u00a0 Do not be confused by thinking the MCS-90 endorsement is auto pollution liability coverage.\u00a0\u00a0<\/span><\/p>\n

      Underground Storage Tanks<\/b><\/p>\n

      Storage tank financial responsibility requirements ensure that owners\/operators of underground storage tank systems can financially handle a release from the tank system. 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.\u00a0\u00a0<\/span><\/p>\n

      Real estate developers\/owners with a financial responsibility strategy dependent upon state UST funds need to regularly confirm fund solvency and length of time it will take to get reimbursed.\u00a0 If part of your business strategy depends upon the state fund, this means just that, you are putting the future success of your business in the hands of the state.\u00a0 You need to strategize on \u201cjust how strong is your business\u201d if you are putting its future in the hands of your state government.\u00a0<\/span><\/p>\n

      Contractors Pollution Liability (CPL)<\/b><\/p>\n

      Note:<\/b>\u00a0 livestock<\/span> operations have potential environmental exposures from the vendors they hire to perform services, i.e. <\/span><\/i>co-op services, mechanical, plumbing, HVAC, electrical, refrigeration, animal waste land application, herbicide \/ pesticide application, harvesting\u2026).\u00a0 <\/span>Should your vendors cause an environmental problem or exacerbate an existing environmental issue their general liability insurance policy typically will have either an absolute or total pollution exclusion.\u00a0 In order to be protected you should make sure your vendors have Contractors Pollution Liability (CPL) coverage before they begin doing work.<\/span><\/i><\/p>\n

      CPL provides coverage should an insured, while performing their covered operations, cause or exacerbate a pollution liability while working at a 3<\/span>rd<\/span> party location.\u00a0 For these contractors there is contractor\u2019s pollution liability (CPL) coverage.<\/span><\/p>\n

      Property Transfer Coverage<\/b><\/p>\n

      Note:\u00a0 <\/b>This coverage is designed for buyers or sellers of real properties.<\/span><\/i><\/p>\n

      When buying or selling property there can be unknown preexisting environmental conditions. Since environmental due diligence (All Appropriate Inquiry (AAI), a Phase I or Phase II survey, Baseline Environmental Assessment (BEA)\u2026.), cannot guarantee uncovering all potential environmental liabilities, insurance companies have created property transfer insurance. This coverage protects the new owner or any party with an insurable interest, against unknown environmental conditions that may be discovered during the policy period, that were not caused by the new owner.\u00a0<\/span><\/p>\n

      This coverage not only helps to keep the property at its maximum value, it will assist the purchaser in being able to secure the necessary financing to complete their transaction.\u00a0 You can cover multiple locations on a single policy.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

      Environmental exposures include storage, use and disposal of fertilizers, pesticides (Glyphosate), and herbicides;\u00a0 Animal waste management;\u00a0 Disposal of liquid wastes in septic or leach systems<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[5],"tags":[388],"class_list":["post-2654","post","type-post","status-publish","format-standard","hentry","category-risk","tag-farming","entry"],"_links":{"self":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2654","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/comments?post=2654"}],"version-history":[{"count":1,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2654\/revisions"}],"predecessor-version":[{"id":2655,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2654\/revisions\/2655"}],"wp:attachment":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/media?parent=2654"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/categories?post=2654"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/tags?post=2654"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}