{"id":2683,"date":"2022-05-10T21:10:21","date_gmt":"2022-05-10T21:10:21","guid":{"rendered":"http:\/\/estrategist.com\/website\/members\/?p=2683"},"modified":"2022-05-10T21:10:21","modified_gmt":"2022-05-10T21:10:21","slug":"distilleries","status":"publish","type":"post","link":"https:\/\/estrategist.com\/members\/distilleries\/","title":{"rendered":"Distilleries"},"content":{"rendered":"

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

Any material, substance, liquid, product, etc\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

Most commercial insureds assume that claims arising from their operations are covered by the general liability policy. However, claims resulting from a \u201cpollution incident\u201d are excluded from most general liability policies, which leaves commercial insureds with gaps in coverage. What pollutants are impacting your business?<\/span><\/p>\n

Environmental Exposures Impacting Distilleries<\/strong>\u00a0<\/span><\/p>\n

May include, but are not limited to<\/b>; Disposal of liquid wastes in septic or leach systems; Pollutants from neighboring properties migrating onto your;\u00a0 Mold;\u00a0 Asbestos;\u00a0 Lead;\u00a0 Storage and transportation of raw materials and product;\u00a0 Leaking above and\/or underground storage tanks;\u00a0 Air emissions from distilling process;\u00a0 Storm water runoff;\u00a0 Vapor intrusion;\u00a0 Spills from loading and unloading product and materials;\u00a0 Faulty refrigeration units;\u00a0 Faulty on-site disposal of trash, garbage and other waste materials;\u00a0 Historical contamination of property due to prior property uses;\u00a0 Natural resource damages;\u00a0 Vandalism;\u00a0 Easements on the property (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 air emissions from emergency power generator systems;\u00a0 Adverse reactions and interactions of chemical compounds that accidentally commingle during a fire;\u00a0 Cleanup of toxic sludge that develops after a fire; \u00a0 Devaluation of property to do known or perceived environmental conditions; and more\u2026<\/span><\/p>\n

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

    \n
  1. A Wild Turkey distillery caught on fire. Inside the warehouse were 17,262 barrels of bourbon, each containing 53 gallons of 107 to 112 proof bourbon. Much of the alcohol escaping measured 50 percent by volume. Some of the bourbon had aged 15 years already. The liquid had to go somewhere since it couldn\u2019t all burn at the same time, and ended up in the Kentucky River. No one was killed from the fire, but the damage had just begun. This accident forced schools and businesses in a town of 8,000 to close for 2-days. People from Frankfort called to say that they could smell the bourbon from the water. A few dead fish had also floated to the surface.\u00a0 As a few more days passed, the number of dead fish had reached into the tens of thousands. The ultimate cause of the fish kill was not from alcohol poisoning, but to the depletion of oxygen. The alcohol was shown to be the accelerator food source causing a major bacteria outbreak that consumed the oxygen in the river and created a dead zone some 9-12 miles long. \u00a0Wild Turkey distillery was liable for the cleanup, 3<\/span>rd<\/span> party property damage and business interruption, and natural resource damages\u2026.<\/span><\/li>\n
  2. 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, which seeped into the underlying soils and required costly remediation. The total cost for investigation, removal and disposal exceeded $320,000.<\/span><\/li>\n
  3. A waste hauler was hired to transport manifested waste materials to a 3<\/span>rd<\/span> party disposal site.\u00a0 During transportation the hauler got into an accident, causing the truck to overturn and spills its load.\u00a0 Under CERCLA, the distillery must contribute for their apportionment of the load for cleanup cost since federal law states that you own your waste from cradle to grave.\u00a0 Cost to settle the claim was $700,000.\u00a0<\/span><\/li>\n
  4. As the result of a fire, a distillery was subject to clean up cost in excess of $400,000.\u00a0 While the fire department was extinguishing the fire, burning and melting inventory comingled creating a hazardous contaminant that went into the local storm water system.\u00a0 The storm water system emptied directly into a stream.\u00a0 In addition to cleanup costs, the distillery also had to pay an additional $150,000 for natural resource damages to the streams ecosystem.\u00a0 <\/span>NOTE: fire departments are immune to pollution claims arising from their work while putting out fires.\u00a0<\/span><\/li>\n
  5. A distillery was sued when contamination was discovered in the drinking water at a new residential development. After further investigation, it was determined that the pollutants were not used as part of the distillery\u2019s operation, and that the processing facility was not the source of the contamination. The distillery was eventually released from the lawsuit. However, they had already expensed over $50,000 in legal defense costs.\u00a0<\/span><\/li>\n
  6. During expansion of a production line, excavators came across oily soils with a petroleum odor.\u00a0 Further investigation uncovered an old, undocumented sludge-drying pit, which the previous owner had used. The distillery had to remove and remediate the soils. Cleanup costs exceeded $400,000.\u00a0<\/span><\/li>\n<\/ol>\n

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

    Because pollution losses are a severity risk, versus a frequency risk, most distilleries lack the financial strength to self-insure their environmental liabilities. Since every distillery is impacted by environmental liabilities, 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

    The <\/b>Three Main Benefits<\/b> environmental liability insurance offers:\u00a0\u00a0<\/b><\/p>\n

      \n
    • 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 have to expense defense costs i.e. legal fees, environmental investigations, etc.\u00a0\u00a0<\/span><\/li>\n<\/ul>\n
        \n
      • \u00a0<\/span>Claim Management<\/b>:<\/b>\u00a0 All policies come with specialists to assist you in handling a claim.\u00a0 Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages\u2026.?<\/span><\/li>\n<\/ul>\n
          \n
        • 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\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/li>\n<\/ul>\n

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

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

          EIL is for distilleries 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 over turn 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

          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 impacts for Distilleries include disposal or leaks of liquid wastes in septic or leach systems, emissions from distilling process and more.<\/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":[396],"class_list":["post-2683","post","type-post","status-publish","format-standard","hentry","category-risk","tag-beverage","entry"],"_links":{"self":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2683","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=2683"}],"version-history":[{"count":1,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2683\/revisions"}],"predecessor-version":[{"id":2684,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2683\/revisions\/2684"}],"wp:attachment":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/media?parent=2683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/categories?post=2683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/tags?post=2683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}