Navigating the Complex World of Insurance

With custom-designed insurance policies, many of the cleaning and restoration industry’s insurance woes can be resolved.




Let’s transport together back to 2003 when a court ordered Farmers Insurance to pay Melinda Ballard $32 million for a small water damage claim gone bad that resulted in toxic mold growth in her home.

Although the payout was eventually reduced to just over $4 million, the point still got across to insurance companies throughout the industry. Ballard is the number one person insurance companies love to hate. A 2003 article by The Austin Chronicle stated insurance companies use the Ballard case as ammunition against the fight of frivolous lawsuits.

What is particularly interesting about the Ballard case from the viewpoint of an insurance professional is that the claim originated from a small water damage loss. Due to the lack of urgency from the claims department, the small water leak turned into extensive mold growth. Instead of getting the water out as soon as possible, the claims adjuster wanted to investigate the loss, which took two months. Within those two months, the loss worsened and resulted in detrimental bodily injury to family members as well as an uninhabitable home.

A claim similar to the Ballard case could happen to any restoration contractor no matter the size of the firm or the job.


Have you ever wondered why you are rated as a carpet cleaner on the declarations page of your commercial general liability policy even after you have told your insurance agent most your revenue is from water damage restoration?

By: Kari Dybdahl


Claim: Frequency Kills: Part 1

How a few insurance claims can make your firm uninsurable

By: David Dybdahl | July 2018

When should you report a claim?

Here are little known facts in insurance:

What does this boil down to? Insurance Is Important! You need it to run your business as well as protect it!  With out it, you will be unable to get a majority of jobs and leave yourcompany open to loss that could bankrupt it! 

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Insurance Is Important! You need it to run your business as well as protect it!

The Sudden and Accidental pollution coverage myth

Sudden and accidental pollution coverage and Greek gods are both myths. People gave up on believing the Greek gods would do them any good more than a thousand years ago. However, due to the crafty work of insurance marketing spin doctors, the sudden and accidental coverage myth in general liability insurance policies persists in the US insurance business.


By: David Dybdahl

Pollution exclusions have been the cause of more litigated insurance coverage disputes than any set of words in the history of insurance. The words “sudden” and “accidental” are at the root of many of these coverage disputes.

Looking at the insurance marketing slang used to describe pollution exclusions, it is not surprising that there is so much insurance coverage litigation over denied pollution-related claims. Insurance coverage litigation is created when insurance buyers think they are covered for a loss that the insurance company thinks is excluded. It turns out that insurance sellers and buyers and their lawyers often have some very different ideas about what sudden and accidental pollution might mean.

Sudden and Accidental Pollution Coverage

Representing a “pollution exclusion” as “pollution coverage” is a great way to create coverage litigation. It is still common to hear in the insurance brokerage community that “this policy has sudden and accidental pollution coverage.”

Much of the new insurance coverage litigation over pollution exclusions in property and liability insurance policies could be avoided if the insurance marketing spin doctors could be reined in from developing feel-good words to disguise the effects of pollution exclusions. Sudden and accidental pollution “coverage” has as its foundation an exclusion in the comprehensive general liability insurance policy that has not been used for over 30 years. In my opinion, the use of the words “sudden and accidental pollution coverage” on new insurance policies should go the way of Greek myths; both make interesting reads, but neither is based on facts.



Private Risk Financing for Environmental


Expert Insight Panel:
April 19, 2018 1:30 pm

Bloomberg Environment


Brad Maurer
J.D., CPCU, American Risk Management Resources Network,
Philadelphia, PA

Brownfield Initiative Programs have three common elements:

  • Statutory liability relief for successfulremediation,
  • Use of voluntary cleanup programs and expedited governmental approvals for
    remedial actions to shorten remediation periods, and
  • Funding to identify brownfield sites and bridge the financing gap between cleanup costs and property market value.


Superfund Site Redevelopment: A Brownfield Approach to Financing Environmental Remediation Costs for Site Reuse

The Environmental Protection Agency, through its Superfund Task Force, has indicated that the agency will be focusing on streamlining and expediting cleanup and reuse of contaminated sites, with a major emphasis on involving private parties and encouraging private investment.
This session will explore the costs and benefits of several private risk funding approaches for site cleanups, such as: litigating old general liability insurance policies, purchasing pollution legal liability and cost cap insurance, and
incorporating environmental liability transfer and guaranteed fixed priced remediation strategies at sites. The session will provide an overview of common terms and conditions associated with the various options, the market
and providers for each of these options, and their potential role in transactions through real-life case studies.

Download The Article HERE


Insuring Farmers for Environmental Damage Claims

Environmental impairment loss exposures are inherent in the operation of a farm, and these loss exposures cannot be avoided in the business of farming. Recent court rulings have shown that farmers face pollution-related loss exposures, most notably from drinking water supply contamination and odors. On top of that, farm package insurance programs commonly sold to farmers do not provide any effective coverage for claims arising from gradual contamination of soil and water or from odors.

Insuring Farmers for Environmental Damage Claims

Increasing Litigation

Across the country, lawsuits are increasing along with the growing size of farming operations. The alleged damages being sought by the plaintiffs in some of these lawsuits are in amounts never seen in the agricultural economy.

In a recent example of surprising environmental damage claims being made in farming country, the city of Des Moines, Iowa, sued the County Board of Supervisors in three counties northwest of the city for over $180 million. The city did so to recover its anticipated costs to construct and operate a new water treatment plant needed to treat the drinking water supply serving over 600,000 residents. The cost to build and operate the water treatment plant was estimated to be as high as $183,500,000.

Read More HERE

“the good news is that specialized environmental impairment insurance for farms is available through thousands of insurance agents and brokers across the nation..”

By: David Dybdahl

Coauthor Aaron Millonzi


6 Things to Know to Get Paid for Sewage Claims

By: David Dybdahl

A continuing conversation on getting paid, working with mortgage companies, and insurance dilemmas.

This is the third in a series of articles on how to get paid for insured restoration work. The first two articles focused on accelerating payments from insurance companies and from banks holding two party checks in escrow, mostly in homeowners insurance claims.

This article focuses on getting paid for water losses on commercial property. The writing is on the wall; it will become increasingly difficult to be fully paid for jobs involving a speck of mold/bacteria or Category 3 water in the future, if the property is not insured under a specially designed Environmental Impairment Liability (EIL) insurance policy. Restoration firms providing Emergency Response Plans to the commercial property owners and management firms in their area can cut the costs of this needed insurance by half.

Changes in claims payment practices combined with universal exclusions for restoration work involving fungi/mold/bacteria have created the situation where 99% of all commercial property owners are severely underinsured for any loss involving a speck of any type of mold or bacteria in any sequence in the job. Being underinsured creates problems in getting paid when a property owner is dependent upon insurance to pay for a loss.

The good news for remediators is 99% of claims adjusters do not know how to pay for claims when there is a sublimit on the policy for mold or bacteria-related losses. The result is uncovered claims for losses involving a speck of mold or bacteria have been routinely paid for the last 12 years. However, things are changing fast in the claims business. Today, there is a much higher chance that a remediator will be left holding the bag with a bad debt for the work performed for underinsured property owner or manager.

Here are six factors to consider to assure payment for mold or bacteria related (Category 3) water jobs:



The need for the industry to embrace environmental insurance

He started from the bottom and now he’s making history.

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He started from the bottom and now he’s making history.

Sixty-three-year-old David Dybdahl was one of the few professionals who studied and mastered the craft of insurance in college – in fact, he finished his BBA with a degree in risk management insurance at the University of Wisconsin-Madison. While he says he was not the brightest student in college, Dybdahl has certainly made a significant mark in the industry, particularly in the environmental insurance segment.

Dybdahl is the president of American Risk Management Resources Network (ARMR), a specialty insurance brokerage firm offering customized insurance products in the United States and Canada. Over the past three decades, he was able to work on the placement of thousands of environmental insurance policies both as the placing broker and as the global environmental practice leader.

Dybdahl served the US Environmental Protection Agency’s Contractor Indemnification Technical Review Panel in 1986, providing the panel with technical information on environmental insurance issues for the United States Department of Defense and Department of Energy.

He also once took the helm of the Environmental Task Force of the National Association of Insurance Brokers and, in 1999, he founded the Society of Environmental Insurance Professionals, an organization advocating for the enhancement of environmental insurance’s utilization as a risk management tool.

Insurance Business had a brief conversation with Dybdahl to get to know his insights about the industry. In this profile piece, he shares the most challenging issue facing the environmental insurance industry. He also outlines his hopes for the industry for the years to come.


Getting Paid for a Commercial Sewage Loss

By: David Dybdahl January 2018

A continuing conversation on getting paid, working with mortgage companies, and insurance dilemmas.

In December, you read about six factors to consider to be sure you get paid for commercial category 3 water jobs. It was part of an ongoing conversation about a shift in coverage on these claims. While most insurance policies exclude coverage for cat 3 water, for decades they were paid out anyway by adjusters. Now, things are changing, and getting category 3 water jobs paid for is not so easy.

For unknown reasons, claims adjusters must have read the 12-year-old fungi and bacteria sublimits on property policies in 2016 and started pulling the trigger on denying claims under the sublimits of coverage.



By: Kari Dybdahl

Stand out to commercial property owners and managers with an emergency response plan.


It is no secret that commercial properties are the holy grail for restoration contractors. This is true for many reasons — the jobs are larger, and it builds your reputation with other property owners and managers, to name a few.

The trick that can be difficult for small- to mid-sized restoration firms is how to get into the door of not only the property manager and owner, but also the insurance agent who writes their insurance.

You are not alone; you might be thinking: “Is there a magic trick that I don’t know about?” As with everything, it has a little bit due to do with luck and a lot of to do with intentionally positioning yourself to your prospect with a value that no one else has brought them. This value can be exhibited by a range of items.

Unlike my usual articles, I’m not going to talk about insurance for cleaning and restoration contractors at all. I am going to walk you through how to fill your sales pipeline with commercial properties to intentionally position your company for first calls on commercial properties in your area. We are going to go past the brochures and the doughnuts and go straight into an innovative value that many of your competitors are not utilizing.

Making a plan

So, what is the inside secret to filling your sales pipeline with commercial properties? Anyone biting their nails?

The secret to successful sales for commercial properties, both for the insurance agent and property owner and manager, are Emergency Response Plans (ERPs). ERPs are used similarly to a hold-harmless agreement. The contractor walks through a property and evaluates any existing or threatened indoor air quality issues. Some finish with a plan that they hand to the property owner and/or manager stating what to do when a problem arises, small or catastrophic, and when to call a professional.

In the perspective of the insurance agent and carrier, these plans are an incredible value and could very well avoid covering a pre-existing condition at the property that was not uncovered in the insurance submission items. To a property owner and manager, the ERPs are an incredible value to assist with keeping the property to a certain standard level and reducing their risk of liability from the tenants and occupants.




Mold Takes Over
The #1 Spot In Pollution Claims!

By: David Dybdahl February 2018

Today less than 1% of commercial buildings are covered under EIL policies; every commercial property owner or manager is a prospect for new business!

Today, office buildings, schools, colleges, hotels, condos, apartments and shopping malls mack much better prospects for sale of an environmental insurance policy than a landfill does.

For agents and brokers to capture this new business opportunity, significant improvements on coverage and price neede to be made to the traditional EIL Product line. The EIL product line was originally designed to insure hazardous waste sites; off the self, these policies do not work very well to insure a commercial property. The EIL insurance policy, rating models, loss control services, and application process all needed to be altered to make environmental insurance functional for clean commercial properties.

Find Out More

After seven years in R&D, the ARMR HPR environmental insurance product incorporates the needed modifications. The ARMR HPR product line is an easy-to-sell environmental insurance policy specifically designed for commercial property owners and managers. With minimum premimiums as low as $6,000 for a 3-year policy with a $1,000,000 limit in liability and target prices cost less that 15% of the property insurance premium, effective EIL insurance is now within the reach of most commercial property owners and managers. The ARMR HPR environmental insurance product can be accessed through BIG I markets under pollution Insurance: Contractors-Commercial Properties, UST’s, All other.

 In 2017, mold became the #1 cause of loss under Environmental Liability (EIL) insurance policies. Almost all insured mold claims cam in the commercial properties