What do airports, hospitals, manufacturers and prisons have in common? Oddly enough, they all have environmental liabilities and are representative of the variety of customers the Industrial and Commercial Facilities business unit serves regularly. The unit specializes in the environmental risks faced by nonenvironmental facilities and businesses, for which pollution liability insurance has increasingly become a necessity in today's environmentally conscious and litigious society.

While the exposures faced by industrial and commercial facilities vary significantly, they do have one factor in common the potential for catastrophic loss. The following case studies illustrate the variety of environmental exposures faced by non-environmental facilities and the possibility of significant financial loss from unprotected pollution liabilities.

Toy Manufacturer
A metal toy manufacturer removed oil and grease from toys prior to painting them. The toys were passed through a vapor bath of trichloroethylene (TCE), a common solvent. This process generated a liquid waste of TCE and oil. After this process went on for over 30 years, an engineering study revealed that the groundwater surrounding the plant contains significant concentrations of TCE and other solvents. The cleanup of the site is estimated in excess of $900,000.

Auto Dealership
A five-acre property was used as an auto dealership from the early 1970's to 1982. Cracks in concrete around the former hydraulic lifts in the parts area as well as maintenance areas where oils and solvents were used caused contamination of soils with volatile organic compounds, total petroleum hydrocarbons (TPH) and lead. In addition, TPH contamination was found near a stormwater outfall pipe leading to a creek. Result: Remediation costs to remove and dispose of contaminated soils exceeded $200,000.

Food Processing Firm
A malfunctioning refrigeration system causes a release of over 1,000 pounds of anhydrous ammonia. The immediate area is evacuated for over two hours. Claims are submitted by two adjacent residents due to respiratory problems associated with the ammonia and five businesses for contingent business loss. Result: Claim reserves are pending.

University
A large university decides to place a new building over a parking lot. Upon excavating the parking lot, petroleum hydrocarbon contamination was found. The university had no idea of the historical use of the area. Investigation and sampling effort have pinpointed the source and extent of contamination. Depending on the cleanup option chosen, on site treatment and/or cleanup costs are estimated at $300,000 to $600,000.

Coverage You Can Count On...

Clearly, our customers have a wide range of exposures and liabilities. We responded to these risks by creating specialized programs and services exclusively for industrial and commercial facilities. Our Pollution and Remediation Legal Liability policy form is specially designed to address the unique exposures of customer groups highlighted in the preceding case studies:

Our POLLUTION AND REMEDIATION LEGAL LIABILITY (PARLL) policy form is a claims-made policy. The policy agrees to pay on behalf of the Insured for

• third-party legal liability claims including on-site and off-site bodily injury and property damage;
• remediation expense from pollution conditions on, at, under or emanating from covered location(s);
• legal defense expense arising from on-site and off-site loss or in connection with remediation expense. The policy responds to loss, remediation expense or legal defense expense in excess of any retention amount; and
• claims made against the Insured for pollution conditions arising from the Insured’s product or waste during transportation by a third-party carrier.