Policyholders are long past the point where they could expect their conventional liability and property policies to respond to and cover most environmental exposures. A modern and robust insurance program for a company in almost every industry necessitates some form of coverage specifically written to respond to environmental exposures.
Just as important as modern insurance solutions can be, researching and maintaining historical insurance documentation can be vitally important, as the combination of federal environmental laws and “occurrence” based insurance may mean pursuing insurance coverage for decades in the past.
With an ever-expanding array of both coverage issues and coverage solutions, policyholders and brokers can justifiably find themselves disconcerted, wondering whether they are protected against these exposures. SDV has advised on and litigated these issues for 25 years, in jurisdictions across the country, finding and securing coverage for our clients in many jurisdictions.
Environmental insurance claims arise from a wide range of circumstances, including both first and third-party claims. Environmental insurance is a vital financial resource for a wide range of industries and companies having any degree of control or direction over a natural resource. Under U.S. environmental laws, such as the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA” or “Superfund”), companies can face extremely expensive litigation decades after a pollution incident. They may even be held responsible for clean-up costs for pollution caused by a property’s prior owner. When this happens, the coverage picture is often very complex, involving the interrelationship of many years of coverage, which varies drastically across different jurisdictions and time periods.
While massive “Superfund” and oil spill cases can grab many of the headlines in this area, it does not take a major event or federal action to trigger an environmental claim. Many exposures that do not involve chemicals or other hazardous substances that can expose your company to liability or frustrating ongoing costs that would have been covered under one of the many modern environmental coverage solutions.
Although coverage litigation has addressed whether hundreds of different substances constitute “pollutants” giving rise to coverage, some common sources of environmental coverage claims include the following:
- Pipeline/energy exposures
- Fire smoke
- Faulty system fumes
- Lead paint
- Poor air quality/ Legionella
SDV has Helped our Clients and Broker Partners Address Environmental Coverage Issues in Many Contexts, Including the Following:
- Receipt of an EPA Information Request Letter
- Receipt of an EPA Potentially Responsible Party (“PRP”) Letter
- Prosecution of a CERCLA Action by the EPA and other PRP’s
- Release of a Pollutant on Your Own Property
- Release of a Pollutant onto a Third Party’s Property
- Release of a Pollutant in the Course of Transportation
- Bodily Injury Through Exposure to a Pollutant
- Business Interruption Resulting from Contamination
In Helping our Clients and Broker Partners, SDV has Extensive Experience Dealing with both Novel and Common Environmental Coverage Issues:
- Meaning of “Pollutant” under CGL policies
- Trigger of Coverage for Continuous Injury Claims
- Allocation of Coverage Across Multiple Triggered Policies
- Efficient Proximate Cause Analysis
- Whether EPA Potentially Responsible Party and Information Request Letters Constitute a “Suit”
- Claims-Made Reporting Issues
- Missing Policies for Older Pollution Events
- “Other Insurance” Clause Disputes
- Horizontal vs. Vertical Exhaustion
- “Stacking” of Limits
- Scope of Rectification and Emergency Response Costs
SDV and its Environmental Coverage Practice Group are experienced with these complex issues. We approach environmental coverage as holistically as possible, from policy review and improvement prior to placement to litigation of coverage disputes post-pollution incident. SDV operates with the singular primary goal of maximizing coverage for environmental liabilities, whether in the policy placement and development process or in guiding our clients through the insurance recovery process, or any point in between.
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