Brownfields by their very definition involve properties with environmental liability risk:
A brownfield is a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. USEPA
The definition is broad and includes properties that may have contamination. It is a generally accepted principle that reusing a brownfield is preferable to developing greenspace for a host of reasons, but the top four include:

“We understand that these are economic development ventures and that risk costs must be managed and defined to effectuate a financially successful project.”


Improved Risk Management Tips for UST’s

Proactive v. Reactive

Many agents look for help for their clients on underground storage tanks (USTs) over 30 years old when it is already too late. The client wants you as the agent to shop around because the premium or deductible doubled
or tripled. This scenario does not need to happen to you as an agent. Using a knowledgeable, specialized wholesaler will help you avoid this worst- case scenario altogether. You will be able to proactively educate your client securing the relationship and renewal for years to come. Below, you will find five tips on how to be proactive v. reactive when it comes to UST risk management.
Carriers will react in a variety of ways when underground storage tanks approach 30-years-old. They will either non-renew, will not consider/decline, will not match retroactive dates, significantly increase premium or significantly increase the deductible/self-insured retention. Why does the private insurance marketplace react this way? That is because the state’s design it this way for everyone’s benefit including all neighboring stakeholders. Replacing the tanks before 30 years of age is in everyone’s best interest to prevent a release (unfortunately, everyone besides the insured’s bank account).

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Why do Businesses Self-Insure Their Pollution Liability?

It’s Irresponsible.

By: Brad Maurer October 2017

Businesses purchase insurance so that they can afford to compensate others for the harm they accidentally cause while in the pursuit of their enterprise.  Insuring against injury is good business and is also good corporate citizenship.  Commercial enterprises have a social responsibility to fund the correction of their mishaps.  They certainly have legal responsibility to do so, but in today’s social media environment, goodwill and reputation are threatened almost instantaneously by publicized acts of social irresponsibility.  It’s good business to do right.  It’s also good business to be able to afford to do right. 

Business relationships predominantly dictate what liability is insured and for how much – so much so that businesses focus on the insurance they are required to have and lose sight of the remaining exposures they may not have insured. If a customer didn’t ask for a certificate of insurance for it, it is often uninsured. Unless a business is a waste facility or environmental services firm, their customers rarely ask for evidence of pollution insurance. That doesn’t mean that a company doesn’t have the exposure. We know the obvious examples (e.g. the refinery oil spill, the chemical manufacturer air release and the waste treatment facility sewerage release, etc.), but decades of cases argued over “what is a pollutant” have documented hundreds of scenarios of uninsured pollution losses for more innocuous events. Although some courts rule that the pollution exclusion applies only to “traditional pollutants” to which environmental laws apply, many allow a broader interpretation of what is a “pollutant”.

…These are just a few examples of hundreds of cases where the “pollutant” arose from everyday accidents that we do not normally associate with traditional pollution releases. While we can debate ad-nauseum whether the absolute pollution exclusion is abused, we must note that there is a likelihood that insurers will apply it and businesses will spend time and money to litigate it.

Download the Full Article HERE


Environmental Risk Transfer Solutions for Mergers and Acquisitions

By: Brad Maurer JD, CPCU

In every business transaction, buyers want to be assured of what they are buying.  In the context of mergers and acquisitions, environmental liability is an elusive issue to evaluate and quantify.  The strict, joint, several and retroactive nature of environmental liability for releases of hazardous substances creates uncertainty because it attaches not only to current but also past operations of a business. Environmental due diligence, although pervasively performed is notoriously inaccurate.  Most environmental due diligence studies performed by technical experts are too focused on known issues and pay just cursory attention to potential issues.  These studies often fail to evaluate current operational and product-based environmental risks.  Undefined and unmanaged environmental risk makes it difficult to successfully purchase or sell an enterprise.  Defining what potential financial loss environmental liability poses is essential to properly value and structure a transaction.  American Risk Management Resources, LLC (ARMR) is an expert at environmental risk identification, evaluation, and treatment.  We assist in defining environmental risk to aid in the successful transfer of equity and assets.

Benefits of Effective Environmental Risk Management

  • Defines the known risks and their cost of treatment so that true deal valuation can occur
  • Protects directors and officers from liability
  • Protects shareholder value from unexpected costs
  • Simplifies the transaction by transferring risk to a well-capitalized insurer
  • Reduces post-transaction representations and warranties litigation
  • Increases the success rate of transactions with significant environmental issues

The most cost-effective means of risk transfer is the purchase of liability insurance for unknown
occurrences. There is a very active market for both pollution liability and products liability

An analytic approach to defining and treating environmental liability risk inherent in a merger or acquisition
will ultimately save time and costs. By effectively identifying risks and converting them into concrete costs of
either mitigation efforts or transfer, a company can be more accurately valued. Besides monetizing the risks, the
cost-savings in avoiding litigation and increasing the success rate of any transaction reduces the friction costs of
conducting the deal.

Read the Full Article HERE

Users Guide To Environmental Insurance

By: David Dybdahl

Environmental Insurance

Pollution exclusions in general liability, automobile liability, and property insurance policies create a coverage void for many industrial and commercial insureds. To fill this gap in insurance coverage, a number of specialized environmental insurance policies have been developed to address a wide range of loss exposures. In practice many of the separate coverage’s that will be discussed in this chapter are combined either by the underwriter or intermediaries to build a more complete environmental insurance program to address the needs of a particular insured.

Environmental impairment liability insurance has existed as a separate insurance coverage since1977 in the United States. The market for environmental insurance remained relatively restricted until the late 1980s. Since that time, the marketplace for these coverage’s has expanded rapidly.  Current annual premium volume for environmental insurance exceeds one billion dollars. The vast majority of these premiums are written in North America. However demand is building for environmental insurance in other parts of the world, as the uses of the coverage become better understood.

In this chapter, the term “environmental insurance” is used in a general sense to denote both first-party (property) and third-party (liability) insurance policies, whose primary purpose is to manage pollution-related loss exposures. Within in this context, environmental impairment liability insurance (also called pollution liability insurance) is just one type of environmental insurance.

It is not possible in the space of this chapter to review all of the different environmental insurance policies offered by insurers today. The common denominator for the inclusion of a coverage form in this discussion of environmental insurance is the existence of a specific environmental coverage grant in the insuring agreements. The broad intent of the most popular environmental insurance forms will be presented along with an analysis of the more common exclusions contained within the various policy forms.

The legal basis for environmental liability, as it has evolved under American law, will also be examined.

An Agents Field Guide To Environmental Insurance

by: Harrison Scheider

The first vlog episode of our new series: An Agent’s Field Guide to Environmental Insurance. We talk traps & tools in the env insurance market space along with the scary job-site pollution coverage endorsement. Do not trust em!

As contracting season continues more and more clients need to prove they carry pollution insurance for contracts and new job bids. Have you lost the load as your client’s insurance adviser? Don’t be an insurance zombie and let theses endorsements fool you or your clients for the sake of saving a dollar. The General Liability coverage extensions for job site pollution insurance do not meet most contract requirements.

At their core, these endorsements provide time element exceptions to a total pollution exclusion endorsement in the general liability insurance policy commonly sold to contractors. Although these coverage extensions vary, it is common for the coverage extensions to specifically exclude losses arising from asbestos, mold, lead, and Silica dusts to name a few contaminants. They usually do not apply to completed operations either, which is a common contractual requirement of pollution coverage. A general liability policy with this endorsement is not contractors’ environmental impairment liability insurance or contractors’ pollution liability insurance due of the absence of insuring agreements for environmental losses in a general liability insurance policy.

This creates issues when certifying the need for true pollution coverage in a contract on a certificate of Insurance. Endorsements that alter the pollution exclusions in general liability insurance policies do not fulfill a contractual requirement for environmental insurance in contracts or loan covenants. Pollution coverage extensions to general liability insurance are usually missing at least one of these essential elements in genuine pollution insurance coverage:




Environmental insurance is not just for hazardous waste contractors!

Hidden Exposures for Trade Contractors

Environmental Insurance is not just for hazardous waste contractors! Hidden Exposures for Trade Contractors. Trade Contractors have pollution exposures that are often left unaddressed. Today’s CGL policies commonly contain separate exclusions for silica, mold, bacteria, asbestos, and lead in addition to pollution exclusions. The only way to adequately protect your insured from these
exposures is via a well designed contractor’s pollution liability policy (CPL). The original design team who invented CPL insurance to deal with the mold exclusions of the 80’s, work at ARMR. Network, LLC today. As a result we know a lot about the product line. By not addressing these exposures and offering coverage, you leave both your agency’s E&O and your insured at risk. ARMR.Network, LLC makes protecting the insured and your agency easy.

Some CGL carriers offer limited scope job site pollution endorsements. These endorsements
do not compare in scope of coverage to a properly designed contractors pollution liability policy. After a loss occurs it is too late to determine whether a CPL would have better protected your insured.

It is often thought that only contractors involved in environmental or pollution cleanup need CPL coverage. However, trade contractors have the following gaps in coverage caused by exclusions found in their CGL policies.

Types Of Trade Contractors And Their Pollution Exposures:

• Mold
• Bacteria
• Category 3 Water

Roofing Contractors
• Lead
• Asbestos
• Mold
• Polyurethane Coatings

Read the Full Article HERE

Environmental insurance is not just for hazardous waste contractors!

Environmental Impairment Liability:
Why You Need It

& Why You Should Keep It!

Environmental Impairment Liability: Why You Need It and Why you Should Keep It! The best way to understand the importance of keeping Environmental Impairment Liability (EIL) or Site Pollution coverage in place is to revisit the reason for originally purchasing the coverage.  Companies and organizations buy EIL coverage because they hold some kind of environmental risk or exposure due to operations and/or Environmental Laws.  Some examples of this would be, chemical companies handle substances that can poison an entire drinking water supply for hundreds of thousands of people.  Byproducts from a manufacturing facility’s operations can lead to serious natural resource damage.  The chemical used in dry-cleaning solution has been linked to dangerous health effects from long-term exposure.  The liability associated with these risks tends to be more than most companies are able to or willing to self-insure and look to transfer the risk.  A way to do this is to purchase insurance.  In the case of environmental liability, folks purchase EIL coverage. 

               What’s important to understand, is what drives or creates this environmental liability for companies and organizations.  What makes a company or organization responsible for the natural resource damage they cause or the bodily injury that results from their actions?  The answer is a mix of statutory regulation and Common Law.  Negligence, nuisance, and trespass form the Common Law portion of environmental liability and provide the basis for civil suits.  Environmental protection laws create liability for cleanup costs and damages to natural resources. 

  Download the Article HERE

Expanding Environmental Risks in Credit Positions

By: David Dybdahl Decemeber1st, 2015

Through a convergence of risk factors, more commercial borrowers are exposed to uninsured environmental loss exposures than at any time in history. The emerging environmental risks discussed below are affecting main street business, public entities and farms for the first time.

Bankers as a result of the Environmental Risk Mega Trends detailed below are unsecured with insurance in their credit positions on many more small business borrowers than they have been in the past. The good news is the genuine environmental insurance products needed to address these emerging mega trend risks are readily available in the insurance market place at affordable prices; and have been for many years.

The most significant constraint preventing the wide spread use of environmental insurance is in the insurance distribution system. Insurance agents and brokers receive no training on environmental risks and insurance topics. Therefore, the vast majority of insurance agents and brokers are not educationally equipped to competently advise their customers on these relatively complex insurance topics. The result is lenders and their borrowers alike have a lot of uninsured environmental risks that almost all parties are completely are unaware of.

The Society of Environmental Insurance Professionals (SEIP) is a 501, C,3. not for profit organization dedicated to expanding the knowledge and utilization of environmental insurance. Interested parties are encouraged to visit the SEIP website and join to the organization.

To manage environmental risks in a loan portfolio all a lender needs to do is;

  1. Identify the loss exposures of their borrowers; (There are a lot more uninsured environmental loss exposures in loan portfolios today than there have been in the past 40 years.)
  2. Implement credit policies to avoid uninsured credit positions on loans.

This is easier said than done however.

Read More HERE

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How To Sell Environmental Insurance Coverage The Secrets of the Trade

By: David Dybdahl

There is a secret trick that the pros use to sell a new environmental insurance policy. In this Users Guide I reveal the secrets of the trade utilized by the most successful sellers of environmental insurance policies. Many of the insights presented here are the result of 30 years of full time observations in the field.

The normal insurance sales process of filling out insurance applications, getting multiple quotes, proposing, and hopefully getting an order needs to be inverted in order to achieve any kind of success in the sale of environmental insurance.  

The person in charge of sales for the insurance brokerage firm was trying to figure out why a handful of producers did well in selling environmental insurance but most did not. Even top sales people almost always failed at completing the sale of pollution insurance. What I came up with for the explanation was the successful sales folks were doing things a lot differently in the production process than the unsuccessful sales folks.  Success had little to do with insurance market access or products.

Step One, Establish A Need
  The first step in selling a pollution insurance policy to a new buyer (the best prospect) is to firmly establish the need for the environmental insurance coverage by teaching the customer about the effects of pollution/fungus/mold/bacteria exclusions on their risk management strategy.

Without that first step there is little hope of actually getting an order on a pollution insurance policy at any price.

Coming to the table with a bunch of insurance quotes will not increase the chances of success, but it will burn out everybody involved in the process of getting those quotes.

Download the Full article HERE

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