Today, chemical distributors and manufacturers can take advantage of more environmental insurance products than ever before. In the past, options were so limited that only Pollution Legal Liability (PLL) for third party Bodily Injury and Property Damage (BI/PD) loss was available. This was generally a mandated coverage for chemical distributors for compliance with Resource, Conservation and Recovery Act (RCRA) permit status, where financial responsibility must be shown in order to operate. However, not all chemical distributors are required to carry PLL. But whether PLL is required or not, chemical distributors and manufacturers still face a multitude of environmental exposures. Examples of environmental exposures faced by chemical companies include:

• Spills in loading and unloading areas;
• Storage of vast quantities of hazardous or toxic chemicals;
• Chemical reactions from incompatible materials;
• Improper containment of storage tanks and satellite drum storage facilities;
• Unknown contamination from past operations;
• Cracks in concrete foundations and diking; and
• Air release or spill causing off-site bodily injury or contingent business loss.

Customized Response

XL Environmental has the following options for customizing environmental coverage for chemical companies:

1. Pollution Legal Liability (PLL), providing sudden and gradual coverage for off-site third party liability, including defense cost on a claims-made policy. Defense cost can be provided as a supplemental limit when required by statute.
2. Chemical Pollution and Remediation Legal Liability (PARLL), providing coverage for loss, remediation expense and legal defense expense under one policy for sudden and gradual pollution conditions on, at or emanating from covered locations. The policy trigger is defined as the filing of a claim against the client for pollution release or simple discovery of pollution on-site. Coverage for business interruption resulting from pollution conditions can be endorsed onto the policy.

Superior Features

These coverage lines offer superior mechanisms for risk transfer while providing necessary certificates of financial responsibility for the US Environmental Protection Agency or individual state governments. These coverages also provide superior loss control to help the insured prioritize loss control and remediation tasks. XL Environmental also has the ability to work with captives and/or structure fronted programs in combination with the above-captioned policies.

Creative Options

Another creative product that XL Environmental offers is an Environmental Finite Risk policy. This policy provides a seamless insurance product that structures XL Environmental’s environmental programs (PLL or PARLL) to the individual client’s needs, such as combining funding and risk transfer mechanisms for known and/or unknown environmental liabilities. Some of the features of this program include balance sheet relief or environmental liabilities, risk transfer, potential tax deductibility of overall premiums paid, investment income of fund to maximize return on equity as a reduction for the net cost of the program, remedial cost supervision and claims management.