A Decade of Environmental Claims

In addition to environmental liability trends, environmental regulation development and implementation have continued to evolve and change. Environmental insurance has become more prevalent for many insureds through transactions, development, contracting etc. As the market for environmental insurance increases, the book for environmental claims has evolved.

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Site Redevelopment:

A site which had been purchased five years prior and insured under a premises policy was being redeveloped into multi-family residential units. During the development process, soil was being removed from the basement and testing revealed lead and other wastes. Upon further testing, a “hot spot” was identified that required removal and disposal from the build site.

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A general contractor, building a large senior living complex using wood frame construction, experienced frequent rains during the early stages of construction. Unfortunately, this led to delays in the work, allowing the wood frame to be exposed to the weather for extended periods. As a result, water damage and significant mold growth occurred. This appeared to require tearing out all existing work that had been done, causing a delay in construction. Luckily, through the involvement of the insurance carrier, a mold remediation plan was put in place allowing work to continue on schedule.

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The presence of legionella was detected in the hot water system of a resort property. The state health regulatory agency became involved and a qualified consultant was hired to investigate and remediate the property. A claim was made immediately for the remediation and what could have been an extensive and lengthy remediation process was completed efficiently – significantly reducing the length of business interruption for the resort owners.

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Due to the recent high profile of this class of chemical, many municipal water systems in the United States are continually testing for PFAS in drinking water. A small town found elevated levels in several sentinel wells and began investigating potential upgradient sources. A local industrial park partially upgradient from the water supply was being investigated as a possible source. Later, a Notice of Responsibility was issued which formalized the investigation and required the industrial park to retain an environmental consultant and approved Licensed Site Professional (LSP) to initiate a costly investigation in response to regulators. If the industrial park is identified as a source of PFAS, it will require extensive additional investigation and remediation costs.

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Looking to expand their logistical operations, an e-commerce company purchased a large piece of property that seemed suitable for redevelopment into a warehouse. Prior to their purchase, the company went through proper due diligence and conducted a Phase I site assessment. The Phase I did not note any known contamination onsite, but as the company began construction, they discovered petroleum contamination from an unknown heating oil tank. As a result, construction halted, and the company incurred remediation expenses. 

Download 2023 Industry Trends Claims Scenarios

Download 2022 Industry Trends Claims Scenarios

Download 2021 Industry Trends Claims Scenarios

Download 2020 Industry Trends Claims Scenarios

Download 2019 Industry Trends Claims Scenarios

Interested in learning more about these evolving trends in our industry?

Our team of experienced underwriters, dedicated claims handling unit and technical support staff understands the unique environmental exposures depicted above and can help tailor a policy to find acceptable coverage and claim solutions for your clients!

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The claim scenarios in this newsletter are provided to illustrate the variety of environmental exposures faced by your clients. The facts of any situation which may actually arise and the terms, conditions, exclusions, and limitations in any policy in effect at that time are unique. Thus, no representation is made that any specific insurance coverage applies to the above claim scenarios.