The Problem: A dry cleaning facility leased commercial space from a property owner insured by XL Environmental. PCE was detected in soil and groundwater at the property owner’s site, as well as at an adjacent shopping center, which also contained a dry cleaner.

The Response: Investigations were initiated to comply with state regulatory requirements. XL Environmental Claims recommended and oversaw the installation of an interim remedial system to treat both contaminated soil and groundwater, in order to mitigate the insured’s liability with the state and the adjacent property owner, and reduce damages resulting from pollution conditions.

The insured’s Pollution and Remediation Legal Liability (PARLL) policy afforded coverage for third-party property damage claims and investigatory and remedial site activities. To date, XL Environmental has paid $540,000 for investigatory and remedial activities as well as defense fees and expenses.

The Benefits:

• The installation of an interim remedial system, before the governmental agency required it, served to reduce the insured’s liability and damages and was viewed favorably by the state regulatory agency.

XL Environmental Claims actively sought reimbursement from the insured’s prior insurers for costs to investigate the site conditions and defend the insured. The recovery of approximately $191,000 from prior insurers credits the pollution policy in the same amount, and inures to the insured’s benefit, as the policy proceeds are replenished.