{"id":2820,"date":"2022-05-16T22:14:02","date_gmt":"2022-05-16T22:14:02","guid":{"rendered":"http:\/\/estrategist.com\/website\/members\/?p=2820"},"modified":"2022-05-16T22:14:02","modified_gmt":"2022-05-16T22:14:02","slug":"aviation","status":"publish","type":"post","link":"https:\/\/estrategist.com\/members\/aviation\/","title":{"rendered":"Aviation"},"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. In other words, something that ends up where it doesn\u2019t belong. 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 This Environmental Risk Assessment (eRA) offers a partial list of environmental exposures impacting the aviation industry.<\/span><\/p>\n

Environmental Exposures Impacting the Aviation Industry<\/strong><\/p>\n

Include, but are not limited to:\u00a0 <\/b>PFAS chemicals; Underground and above ground storage tanks;\u00a0 Vapor intrusion;\u00a0 Storm water runoff;\u00a0 Releases or spills during fueling operations;\u00a0 De-icing operations;\u00a0 Environmental cleanup and liabilities that occur after a fire is extinguished;\u00a0 Historical contamination from past operations;\u00a0 Natural resource damages; Easements that cross the property which may leak or spill hazardous materials;\u00a0 Impacting sensitive areas such as wetlands or endangered species;\u00a0 Corroded wastewater and storm water sewers;\u00a0 Old and\/or unknown leaking underground storage tanks;\u00a0 Leaks from elevator hydraulic fluid storage tanks;\u00a0 No auditing of waste handling and disposal companies;\u00a0 Tenants using or storing environmentally sensitive materials, chemicals, waste\u2026.; Spill of oils\/fuels\/chemicals brought onsite; Vandalism; Sick building syndrome; Mold \/ Legionella; Asbestos;\u00a0 Lead;\u00a0 loading and unloading products\/materials from tucks, rail road, barges, aircraft over unsealed ground; <\/span>Dust & vehicles emissions; <\/span>\u00a0Adverse reactions and interactions of chemical compounds that accidentally commingle during a fire; Wastewaters generated from human septage; Janitorial cleaning compounds;\u00a0 No emergency and spill control plans;\u00a0 nuisance odors;\u00a0 Storm water drains near the aircraft fueling locations;\u00a0 Inadequate spill control materials and emergency response contractor agreements; Landscaping operations using chemicals such as Roundup; Silica; Vapor intrusion\u2026.<\/span><\/p>\n

Environmental Loss Examples<\/b><\/p>\n

    \n
  1. American Airlines, under threat of indictment, pleaded guilty to illegally storing hazardous waste at the Miami airport and transporting hazardous and poisonous material improperly on its passenger jet for the last five years.\u00a0 The company will pay $8 million in fines along with making changes to ensure its passengers are safe.\u00a0 They will also apologize in a full-page ad in the Miami Herald.\u00a0 An investigation of the company began after an illegally marked, undocumented bag of pesticide broke open in the cargo hold on a flight to Ecuador, releasing fumes that forced the evacuation of 53 passengers and crewmembers.<\/li>\n
  2. A federal Express cargo plane carrying hazardous materials crashed at the Newark International Airport.\u00a0 The airport, one of the nation\u2019s busiest, was closed after the crash as authorities tried to clear the tarmac and put out the flames on the aircraft.\u00a0 After seven hours the airport was reopened but only for departures.<\/li>\n
  3. 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.<\/li>\n
  4. A contractor was hired to remove two underground storage tanks and associated contaminated soil. During storage tank removal, the contractor\u2019s backhoe hit a natural gas pipeline causing an explosion. Third parties filed bodily injury claims against the contractor, as well as the property owner whose building was destroyed in the explosion.\u00a0 Total claims came to $2,500,000.<\/li>\n
  5. An environmental study performed as part of a regional airport expansion project uncovered two areas of contamination.\u00a0 Leakage was discovered at the airport fueling system.\u00a0 In addition, containment areas for de-icing fluid were found to be inadequate, thereby allowing contaminants to enter a lake adjacent to the airport property.\u00a0 Costly remediation for soils and groundwater was required.\u00a0 Also, the state environmental agency fined the airport for natural resource damages due to the impact on several pairs of bald eagles at the lake.<\/li>\n
  6. A waste hauler was hired to transport its waste engine oil.\u00a0 During transport the vehicle got into an accident and overturned.\u00a0 The waste oil went into a nearby storm sewer that emptied into a stream.\u00a0 Federal law states you own your waste from cradle to grave so the waste generator must contribute for their apportionment of the load for cleanup cost.\u00a0 Cost to settle the claim was $300,000.<\/li>\n
  7. During an airport expansion project, a contractor came across oily smelling soils.\u00a0 An environmental investigation revealed that an FBO that leased space from the airport caused the contamination.\u00a0 The airport exercised the environmental indemnification as outlined in the lease agreement between the Airport and FBO.\u00a0 The FBO was self-insuring their environmental liabilities and the claim caused for their bankruptcy.\u00a0 Since the airport owns the land, under federal law they are ultimately responsible for the environmental condition of the property and the airport paid in excess of $1,000,000 for cleanup costs.<\/li>\n<\/ol>\n

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

    Because pollution losses tend to be a severity, versus a frequency issue, most aviation operations lack the financial strength to self-insure their environmental liabilities.\u00a0 Since every aviation business 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 must 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 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<\/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>\u00a0<\/span><\/h3>\n

          ENVIRONMENTAL IMPAIRMENT LIABILITY (EIL)\u00a0<\/b><\/p>\n

          EIL is for aviation businesses 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 clean up costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multi year terms.\u00a0 Sewer lines and pump\/lift stations can be covered by EIL.\u00a0 Most EIL policies cover above ground storage tanks up to a certain size.\u00a0 You can cover multiple locations on a single policy.<\/span><\/p>\n

          PROPERTY TRANSFER COVERAGE\u00a0<\/b><\/p>\n

          When buying or selling property their 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 Real estate owners and developers who use this product as part of their risk transfer strategy often find they can negotiate with the seller to share the cost and negotiate a better mortgage rate than if they did not have property transfer coverage.\u00a0 You can cover multiple locations on a single policy.<\/span><\/p>\n

          TRANSPORTATION POLLUTION LIABILITY<\/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 Whether it\u2019s fuel or other materials common in the aviation business 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 GROUND STORAGE TANKS\u00a0<\/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

          Who are you doing business with?<\/b>\u00a0 An aviation business is legally liable when environmental contamination originates from site or activity-related business operations on owned property. Hiring licensed third-party vendors to identify, remediate, transport, store, treat, dispose of pollutants does not automatically transfer the associated environmental liabilities to the third-party vendor.\u00a0 General contractors, subcontractors, vendors hired to work at a facility or provide a service present environmental and financial risk, as well.<\/span><\/p>\n

          To minimize your environmental exposure, carefully verify each vendor\u2019s qualifications and, when appropriate, compliance with state and federal licensing and regulations. Utilizing contracts that legally transfer liability to the vendor can further reduce exposure.\u00a0 Confirm proper insurance is in place to meet contractual requirements.\u00a0 Should an environmental accident happen, and the vendor is unable to cover the resulting clean-up and third-party compensation costs, the property owner can be held responsible for the uncovered costs, it is critical to know \u201cwho you are doing business with.\u201d<\/span><\/p>\n

          CONTRACTORS POLLUTION LIABILITY (CPL)<\/b><\/p>\n

          Note:<\/b>\u00a0 <\/span>For aviation operations you have potential indirect environmental exposures from the service vendors you hire.\u00a0 Should your vendors cause an environmental problem or exacerbate an existing environmental issue their general liability insurance policy probably will have either an absolute or total pollution exclusion.\u00a0\u00a0<\/span><\/i><\/p>\n

          Contractors Pollution Liability (CPL) insurance protects the insured should they cause or exacerbate an environmental condition while performing their contractor services.\u00a0 CPL protects the insured for covered operations performed by or on behalf of the insured, while operating away from any premises they own, rent, lease or occupy.<\/span><\/p>\n

          CPL can be offered on a claims made or occurrence basis.\u00a0 Coverage can be written on a job specific basis, or on a blanket basis to cover all the work performed by the insured.\u00a0 Most policies can be endorsed to cover transportation pollution liability, mold, lead, asbestos, defense outside the limits, off-site disposal coverage, emergency response cost\u2026.\u00a0\u00a0<\/span><\/p>\n

          PROFESSIONAL LIABILITY (E&O)<\/b><\/p>\n

          E&O insurance protects an aviation business should an environmental engineer\/consultant make and error or omission in performing their professional services. The standard commercial general liability policy excludes coverage for professional services performed by engineers\/consultants\/surveyors\u2026.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

          Environmental exposures include PFAS chemicals; Storm water runoff;\u00a0 Releases or spills during fueling operations;\u00a0 De-icing operations; Historical contamination 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":[403],"class_list":["post-2820","post","type-post","status-publish","format-standard","hentry","category-risk","tag-aviation","entry"],"_links":{"self":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2820","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=2820"}],"version-history":[{"count":1,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2820\/revisions"}],"predecessor-version":[{"id":2821,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2820\/revisions\/2821"}],"wp:attachment":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/media?parent=2820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/categories?post=2820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/tags?post=2820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}