Editor’s Note

Abstract

Too many companies face significant financial exposure by not having the right insurance in place when there is an environmental claim. General liability insurance policies and property policies exclude most fact patterns involving alleged or actual environmental or pollution damages. The decision to leave a gap in insurance and self-insure environmental exposures should be a thoughtful one, particularly when there are more emerging cancer-causing chemicals being studied and regulated, and a greater variety of detection equipment are being utilized. My 2019 Environmental Claims Journal Editor’s Note addressed emerging contaminants 1,4 Dioxane, and Perfluoroalkyl substances (PFA’s) now the topic of a current movie Dark Waters, resulting in much more expensive remedial investigations and cleanups. The New York State Department of Environmental Conservation (NYSDEC) announced in 2019 they are requiring testing for this new class of chemicals for projects under NYSDEC’s supervision. In the past two years, New York State has set aside over $500 million to upgrade water treatment systems to include an Advanced Oxidation Process because these contaminants are, unfortunately, already in our drinking water. On December 9, 2019, Governor Cuomo approved legislation eliminating the sale of products containing 1,4-dioxane in New York State. Prior studies by the USEPA estimated more than 25,000 prior dry cleaners had used perc/PCE which contaminated the dry cleaner’s site and neighboring properties. One tablespoon of PCE is enough to contaminate two Olympic-sized swimming pools. Pending toxic tort litigation often involves vapor intrusion from solvents such as PCE to the neighboring residences, schools and other buildings which are located above the soil and groundwater plumes. The spillage of solvents was common from storage leaks, transfers, equipment failures, septic systems and sewers, and improper waste disposal in backyards and dumpsters. While PCE testing and remediation is ongoing, numerous other contaminants are regularly detected in the process creating liability disputes among property owners. For many large and small clients’ environmental liabilities have caused severe financial losses and some public relations disasters. In the past couple of years, we continue to experience claims frequency for asbestos exposures, fuel spills, mold contamination claims, lead ingestion and lead dust, carbon monoxide, legionella, sick building indoor air quality, vapor intrusion, chemical releases, silica and dust, PCBs, leaking sewer lines, midnight dumping of hazardous materials, and often offsite disposal based on waste manifests. In addition, a concern exists by many insureds, more than ever, regarding the intentional release of a bioterrorism agent, which can be a virus or bacteria, as there are more than 45 bioterrorism agents identified by the U.S. Center for Disease Control. The environmental insurance marketplace has evolved to cover the gap and provide specialized environmental policy forms for different sectors including health care, hospitality, universities and entertainment venues, oil and gas, contractors, mixed real estate portfolios, and even for manufacturing and distribution businesses.