| No matter which television channel or website you | | | | Coverage territory - The coverage territory within |
| turn to, the Gulf oil spill has dominated the news. This | | | | the policy may not include international waters. |
| is an environmental crisis that will affect the region's | | | | Designated operations - Many Contractor Pollution |
| economic capabilities and natural resources for years, | | | | policies provide coverage only for operations listed on |
| if not decades, to come. Between 2 to 4 million | | | | the policy. If the contractor's work expands beyond |
| barrels of oil have spilled into the gulf, compared to | | | | what is listed, no coverage may be afforded. |
| 257 thousand barrels during the Exxon Valdez event. | | | | Watercraft exclusions - there are specific limitations |
| The fishing and tourism industry, which was | | | | under a package General Liability and Pollution policy |
| depressed before the tragedy, is now virtually | | | | pertaining to the use and length of boats allowed. |
| non-existent. Gulf coast economies from Texas, | | | | Subcontracted work and construction management |
| Louisiana, Mississippi, Alabama, and Florida have all | | | | exclusions - if the remediation contractor is using |
| been affected, and scientists are predicting that the | | | | subcontractors, liability may extend only if the sub |
| Gulf current may carry containments along the Florida | | | | meets specific qualifications and insurance |
| Keys and up the east coast. | | | | requirements. Also, the supervision of subcontractors |
| This disaster creates a tremendous opportunity for | | | | may not be covered unless a Professional Liability |
| remediation contractors and consultants. | | | | policy is in force. |
| Environmental contractors from across the country | | | | Transportation and disposal issues - if the contractor |
| have flocked to the Gulf in search of clean-up | | | | is responsible for the transportation and disposal of |
| contracts. Over twenty-four thousand people are | | | | waste, there may be no coverage afforded under a |
| working as part of the response to the April 20th | | | | basic Contractors Pollution policy, should an incident |
| accident and its aftermath. The spill has created a | | | | occur beyond the boundaries of a job site. Limited |
| wide array of jobs from remediation/spill response | | | | coverage is attainable in the marketplace with proper |
| contractors to ship boat captains to day laborers. | | | | information. |
| Many unemployed fishermen, construction workers, | | | | Product exposures - specific Product Pollution policies |
| and general laborers are receiving OSHA HAZOPER | | | | are available for manufacturers and distributors of |
| training and aiding in the clean up. "We have received | | | | chemical dispersants, separators, containment booms, |
| numerous phone calls about potential start-up | | | | etc. used in the spill response. Coverage can be |
| businesses or companies opening up new divisions in | | | | written stand alone or in conjunction with a |
| this area," said Michael Tighe, Assistant Vice President | | | | commercial General Liability policy. |
| at Beacon Hill Associates, a wholesale insurance | | | | Pollution definitions - vary greatly. Some do not |
| broker and program administrator, specializing in the | | | | include "waste" in their definition of a pollutant. If |
| placement of environmental insurance. | | | | waste/refuse is not included in the definition, it may |
| Remediation Methods Used | | | | lead to gaps in completed operation and disposal |
| More than 46,000 people - and nearly 7,000 boats - | | | | coverage. |
| are now employed in the response1. While fishing | | | | Property - hurricane and wind concerns - In addition |
| business was struggling before the disaster, | | | | to contracting pollution exposures there has also |
| fishermen are now making $1,200 - $3,000 a day | | | | been interest in environmental coverages from |
| laying floating booms that contain oil once it rises to | | | | property owners. In the midst of hurricane season, |
| the surface. Where the oil collection is greatest they | | | | commercial property owners are becoming |
| often create a "burning box", which is a controlled | | | | increasingly concerned that high winds may carry |
| burn over the water. In the marshes and other | | | | petro contaminants onto their premises. Interested |
| wetlands, contractors are mopping the oily sheen | | | | parties are not only coastal, but miles away from |
| with absorbent oil pads, wiping each blade of grass, | | | | shore. If the specified cause of loss is not the |
| which can be time-consuming labor. In open water, | | | | windstorm but rupture of the underwater well, many |
| boats are equipped with oil/water separators that | | | | agents have found little or no pollution clean up |
| skim surface water and can extract two thousand | | | | coverage for real or personal property. The next |
| barrels of oil per day. Thousands of workers comb | | | | wave of environmental contractors to the Gulf may |
| the beach using shovels or shifting machines collecting | | | | be restoration contractors equipped to extract water |
| tarballs on the sand. Unfortunately, oil can be buried | | | | and oil in and on buildings. |
| underneath the sand, between tides, which will | | | | Due to the influx of submissions that environmental |
| require sand incineration or other deeper cleaning | | | | markets are receiving, they are starting to quantify |
| methods. | | | | the number insureds involved in the clean up effort. |
| Potential Coverage Issues | | | | Additional supplemental applications may be needed |
| Below are some coverage issues agents should | | | | to gauge the amount of on and off shore activities, |
| consider when obtaining Pollution insurance for their | | | | as well as the amount of work subcontracted. Some |
| clients. | | | | carriers are limiting their exposure to coastal premises |
| Action over - not all liability policies provide action | | | | site pollution policies, possibly offering coverage with |
| over coverage. An employee of the contractor may | | | | higher retentions or without first party clean up |
| potentially sue the project owner directly for liabilities | | | | triggers. |
| suffered during the work. This type of claim occurs | | | | While agencies scramble to secure pollution coverage |
| more frequently with remediation contractors. | | | | for their clients being affected by the oil spill in the |
| Time element triggers - some policies limit pollution to | | | | Gulf, they should also get a clear picture of the |
| a sudden/accidental trigger only whereby the pollution | | | | prospective insured's scope of operations, contractual |
| occurrence and claim filing must occur within a limited | | | | responsibilities, and qualifications. This is crucial in order |
| period of time (usually 72 hours). A policy that | | | | to offer effective insurance solutions, as no two |
| includes gradual pollution is more effective for | | | | policies are the same in the environmental insurance |
| emergency response contractors. | | | | marketplace. |