THE UNCERTAINTY OF ENVIRONMENTAL RISKS

IN A MORE ENVIRONMENTALLY SENSITIVE WORLD

Agenda Environmental Sensitivities & Current Regulatory Climate

Exposures and Considerations

“War Stories”/New Contaminants

Environmental Insurance, Coverage & Enhancements

Open Discussion & Questions

Anthony Wagar Mike Giese

Willis Environmental Practice Chartis Environmental

212.915.7768 212.458.6244

Environmental Sensitivity & Current Regulatory Climate Deepwater Horizon Oil Blowout in the Gulf of Mexico, Toxic

sludge in Hungary and natural disasters in Japan.

Rising environmental protection initiatives, more stringent regulations, increasing enforcement and our clients growth and strategic expansion into new countries.

Environmental hazards are estimated to be present at 20-50% of all industrial real estate properties.

Exposures & Considerations

Environmental Risks Can:■ Create direct liability■ Result in costly litigation, negatively impact the bottom line

and distort revenue projections■ Cause project delays

What Role Can Insurance Play?■ Transfer Risk■ Manage financial downside due to environmental issues

Exposures & Considerations Considerations Pre-existing Site Conditions

(Unknown Historical/Legacy Issues) Operational Risk/“New” Conditions Legal Defense, Third-Party Bodily Injury

Property Damages and Cleanup Costs

While not high in frequency, environmental claims can be severe. Increased public awareness about pollution conditions and resulting lawsuits for 3rd party property damage & bodily injury. Also, consider the litigation climate of the area where work is being performed

War Stories/New Contaminants Silt/Sedimentation/Turbidity Claims

“It’s just muddy water right?”

Vapor Intrusion “Is it me or does something smell in here?”

Mold/Legionella/IAQ “Just hit it with bleach!”

Green Building “It’s not easy being Green”

War Stories/New Contaminants

Asbestos“It’s not friable – it’s just loose”

Legal Defense“I didn’t do anything wrong… it’s costing me how much?”

Chinese Drywall“Why can’t you just use a good primer and paint over it?”

Env Damage/Cleanup“I have to clean up how much of it?”

Environmental Insurance, Coverage & Enhancements

Contractor’s Pollution Liability

Pollution Legal Liability

Things to Consider Subcontractor CPL

Limits – aggregate or per-project?

Coverages?

In force? Cost impact of individual policies to project Claim situation – which carrier pays? Project CPL – the upside

Eliminates erosion of GC CPL

Claims resolution

Know what coverage is there

Avoid the uninsured indemnity

Top 6 CPL Coverage Enhancements

Defense outside limits PLL coverage for owned sites

Offices Yards/warehouses Maintenance shops Financial assurance for UST’s

Occurrence mold coverage Blanket NODS No EFIS exclusions Broaden definition of pollution conditions

Legionella Mold EMF Low Level Nuclear

THANK YOU!

Open Discussion & Questions