What is Environmental Insurance?
ALL businesses have environmental exposures and Environmental Insurance is a financial assurance strategy that reduces or eliminates the negative impact of uncertain future environmental liabilities. Those liabilities would be anything connected to your business that introduces a pollutant into the environment.
What is considered a Pollutant?
When people think about pollution, they often think about car exhaust, or emissions from fossil fuels, but in truth that’s only a tiny fraction of the puzzle. A pollutant is any material, substance, liquid, product, etc. that is introduced into an environment for other than its intended purpose. In other words: something that ends up where it doesn’t belong. Fresh water, cheese, and milk have all been classified as pollutants by insurance carriers under various circumstances.
Most business owners assume that claims arising from their operations are covered by their General Liability policy; however, claims resulting from a “pollution incident” are excluded from most General Liability policies.
Environmental Claim Examples
- An auto parts manufacturer had been removing oil and grease from their products prior to painting them. The metal goods were passed through a vapor bath of trichloronethylene (TCE), a common solvent. During an environmental assessment it was determined the groundwater surrounding the plant contained significant concentrations of TCE and other solvents. The cleanup of the site was estimated to exceed $900,000.
- During the night, an unknown party illegally placed drums of hazardous waste into a dumpster behind a manufacturer’s facility. The containers were not leaking, but the cost to properly dispose of the illegally dumped waste cost the manufacturer roughly $50,000.
- While moving a large metal coil, a forklift operator hit a hydrofluoric acid above-ground storage tank releasing dangerous fumes into the neighboring community. Area residents and businesses were evacuated and several people were treated at the local hospital for fume inhalation. Claims for bodily injury and business interruption topped $100,000.
- A manufacturer stored incorrectly labeled drums of raw materials used for the manufacture of dry cleaning products. One-day neighbors noticed a thick, whitish-yellow vapor cloud emanating from the vicinity of the drums. The fire department was called and after reading the labels on the drums, they began to spray them with water. This caused an explosion, followed by a thick smoke cloud of sulfur dioxide. Forty plaintiffs filed three lawsuits to recover damages for injuries suffered from exposure to the sulfur dioxide cloud. Damages topped $3 million.
Benefits of Environmental Insurance
Unlike most liability exposures impacting manufacturers, pollution losses are not a frequency risk, but rather a severity risk. This means they may not happen often, but when they do, they are costly and damaging.
Three Overlooked benefits of liability insurance are:
- Defense Costs: Environmental liabilities are relatively new and often end up in highly publicized court cases. Even if you do nothing wrong, you can still get named in a lawsuit and have to pay for legal fees, environmental investigations, and other defense costs.
- Claim Management: All policies come with specialists to assist you in handling a claim. They can help with a variety of things including communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages, and the list goes on.
- Third Party Liability: Most of the time, the cost to clean up environmental problems is far less than associated claims that come in from third parties for bodily injury, property damage, and business interruption. Consider your clients and surrounding homes and/or businesses that could be impacted if you, a sub-contractor, or vendor cause an environmental loss.
Through our market access, we can provide coverage for every class of commercial business as outlined below:
- Real Estate Owners & Operators
- General Contractors / Trade Contractors
- Design Build Contractors / Construction Management
- Manufacturers, Blenders, Distributors, and Environmental Facilities
- Real Estate Developers & Brownfields
- Real Estate Transactions / Business Mergers & Acquisitions
- Environmental Engineers, Contractors, and Consultants
- Restoration Contractors
- Hazardous Material / Waste Haulers
- Industrial Parks
- Neighborhood or Condo Associations
The Mt. Pleasant Agency – Central Insurance Difference
You may think you want the cheapest insurance you can find, but realize you may not be getting everything you bargained for …
While most insurance products are similar in price and function, insurance providers are very different when it comes to structuring a policy that actually covers you.
There’s no such thing as a one-size-fits-all insurance policy when it comes to your business.
We’re your neighbors. We protect people we know and care about in Michigan, and that means we always look for ways to protect you better, including carefully choosing the insurance companies we represent to be both affordable and responsive.
Call 989-772-2977 today and let the professionals at Mt. Pleasant Agency – Central Insurance help you forge the strongest shield possible to help you protect the things you care about most.