{"id":2707,"date":"2022-05-11T19:57:05","date_gmt":"2022-05-11T19:57:05","guid":{"rendered":"http:\/\/estrategist.com\/website\/members\/?p=2707"},"modified":"2022-05-11T19:57:05","modified_gmt":"2022-05-11T19:57:05","slug":"food-distributors","status":"publish","type":"post","link":"https:\/\/estrategist.com\/members\/food-distributors\/","title":{"rendered":"Food Distributors"},"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?\u00a0<\/span><\/p>\n

Environmental Exposures Impacting Food Distributors\u00a0<\/strong><\/p>\n

May include, but are not limited to<\/b>;\u00a0 Product recall for contamination;\u00a0 Uncertainties about the historical use and conditions of property;\u00a0 Spills from underground and\/or aboveground storage tanks;\u00a0 Pollution cleanup that results from a fire;\u00a0 No secondary containment for above ground storage tanks;\u00a0 Vapor intrusion;\u00a0 Spills or leaks from the storage and handling (loading\/unloading) of material containers such as drums, totes or bags from vehicles;\u00a0 Parking equipment over unsealed surfaces allowing contaminants such as oil, fuel, anti-freeze, hydraulic fluids, asbestos\u2026 to pollute the ground;\u00a0 No emergency response training for employees;\u00a0 Unknown, abandoned underground storage tanks;\u00a0 Pollution liabilities that occur while transporting cargo;\u00a0 Accumulated old tires, batteries, equipment\u2026;\u00a0 Raw materials stored on site;\u00a0 Inadequate or no auditing of hazardous and non-hazardous waste handlers, transporter and disposal companies;\u00a0 Poor information on the possible adverse reactions and interactions of chemical compounds that accidentally commingle during a fire;\u00a0 Stormwater runoff;\u00a0 Utilities that cross your property;\u00a0 Corroded wastewater and storm water sewers;\u00a0 Natural resource damages;\u00a0 Asbestos or lead containing materials;\u00a0 Silica;\u00a0 Mold \/ Legionella;\u00a0 Illegal dumping of waste on your property by unknown 3<\/span>rd<\/span> parties;\u00a0 Pollutants from neighboring properties migrating onto yours and more\u2026<\/span><\/p>\n

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

    \n
  1. While transporting products over the road, the driver for a food distributor got into an accident and overturned. The products being hauled escaped the trailer and ended up in a nearby stream. Costs for remediation and natural resource damages exceeded $85,000.\u00a0<\/span><\/li>\n
  2. Loading\/unloading of products and material was conducted over unsealed truck ramps.\u00a0 Over a period of several years, ground water became contaminated from pollutants that were released from idling trucks and storm water runoff.\u00a0 Since the ground water was the only source of drinking water for surrounding residents and the state environmental regulatory agency designated the distributor as the responsible party, the distributor had to pay over $1,400,000 in cleanup costs and supply suitable drinking water until the local municipality could extend water services out to the surrounding residents.\u00a0\u00a0<\/span><\/li>\n
  3. A facility began expansion of a production line. During excavation, oily soils with a petroleum odor were discovered. Further investigation uncovered an old, undocumented sludge-drying pit. The property owner had to remove and remediate the soils at his expense. Cleanup costs exceeded $400,000.\u00a0<\/span><\/li>\n
  4. The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank used for a trucking fleet 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.<\/span><\/li>\n
  5. During the night, a distribution facility caught on fire. As the fire department put out the fire, their high-pressure hoses forced melted plastics, metals, insulation, roofing, drywall, laminate, stored products, and other materials to build up inside the building\u2019s foundation, creating a toxic \u201csludge\u201d. Some of the toxic \u201csludge\u201d escaped the building and migrated onto to neighboring properties. The distributor was responsible for all clean-up costs, 3<\/span>rd<\/span> party property damage, and 3<\/span>rd<\/span> party business interruption, in addition to natural resource damages, which totaled over $2,000,000.\u00a0 <\/span>NOTE: fire departments are immune to pollution claims arising from their work while putting out fires. <\/span>\u00a0<\/span><\/li>\n
  6. A 1,000-gallon diesel aboveground storage tank used for the backup power generator for a distribution facility was in a concrete secondary containment that was cracked. A rupture of the tank spilled 700 gallons into the containment that seeped into the ground causing excavation and disposal of the contaminated soils along with engineering and legal fees exceeding $90,000.\u00a0\u00a0<\/span><\/li>\n
  7. A delivery truck got into an accident and caught on fire.\u00a0 The burning cargo created toxic fumes and when the fire department put out the fire it created contaminant runoff that flowed into a nearby stream.\u00a0 Cost to remediate the site and claims from third parties for bodily injury and property damage due to exposure to toxic fumes exceeded $800,000.<\/span><\/li>\n<\/ol>\n

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

    Because pollution losses are a severity risk, versus a frequency risk, most food distributors lack the financial strength to self-insure their environmental liabilities.\u00a0 Since every food distributor 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

    Furthermore, most commercial insureds only consider the cleanup costs associated with environmental claims. However, the cost of cleanup in often far less than other costs that can be associated with a pollution loss.\u00a0<\/span><\/p>\n

    Three Overlooked Benefits<\/b> of Environmental Liability Insurance\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 food distributors 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 exposures include product recall for contamination, spills or leaks, pollution liabilities while transporting, no emergency response training 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":[19,120],"class_list":["post-2707","post","type-post","status-publish","format-standard","hentry","category-risk","tag-food-industry","tag-transportation","entry"],"_links":{"self":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2707","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=2707"}],"version-history":[{"count":1,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2707\/revisions"}],"predecessor-version":[{"id":2708,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2707\/revisions\/2708"}],"wp:attachment":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/media?parent=2707"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/categories?post=2707"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/tags?post=2707"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}