In addition to environmental insurance coverage, XL Environmental approach to risk management also includes risk control and claims administration services. As part of the insurance program, XL Environmental Risk Control and XL Environmental Claims Administrators provide engineering, technical and legal expertise to further reduce the risks associated with manufacturing operations.

XL Environmental Risk Control Services

The Quality Engineering and Training (QUEST) Program offers a variety of services from XL Environmental Risk Control including health and safety training, industrial hygiene programs, environmental program development and general consulting.

The specialized claims services provided by XL Environmental Claims Administrators encompass the initial investigation of a client’s legal liability through the resolution of the claim. With a distinctive expertise in the management of environmental claims, XL Environmental Claims helps identify cost-effective means of remediation and disposal, negotiates outstanding issues with third parties and regulatory agencies, and retains and monitors counsel for litigation and other legal matters.

Foul Perfume

A fragrance manufacturer purchased the XL Environmental Pollution and Remediation Legal Liability policy. A sudden release of “Essence of Lilac” perfume caused damage to several hundred vehicles. Boats at a marina were also damaged and several bodily injury claims were filed. XL Environmental Claims Administrators immediately responded to contain the costs of the claim. An attorney with a chemical background and an engineer hired a specialized contractor from across the country to chemically treat the perfume particles on the damaged vehicles. This solution was significantly less expensive than replacing the vehicles. The total claim is expected to settle for $900,000.

XL Environmental Risk Control Assistance

A manufacturer of automobile components purchased general liability and pollution coverages through XL Environmental. The manufacturer needed a third party environmental audit to be conducted at the facility. Bundled as part of the policy services, XL Environmental Risk Control performed the audit, providing valuable recommendations to the client to lower environmental exposures. XL Environmental Risk Control consultant made recommendations about secondary containment and hazardous material training. The audit was performed as part of the XL Environmentalg Quality Engineering Services and Training (Quest) Program.

Property Divestiture Coverage

A manufacturer of office furniture was selling a location to a new buyer. XL Environmental Risk Control, as part of the overall premium, was able to perform a Phase I Assessment of the property for the client. In addition, XL Environmental provided ongoing divestiture coverage under the master Pollution and Remediation Legal Liability program for the manufacturer’s pollution exposures that existed prior to the sale of the property.

Case Studies Involving Manufacturers

The following examples demonstrate just some of the many ways in which manufacturers can incur environmental liabilities.

Tank Fumes Taint Air

While transporting a large metal coil, a forklift operator hit a hydrofluoric acid aboveground storage tank releasing dangerous fumes into the neighboring community. Area residents and businesses were evacuated and several people were treated at a local hospital for fume inhalation. Claims for bodily injury and business interruption topped $94,000.

Heavy Metal

A manufacturer stored baghouse dusts containing heavy metals in an uncovered dumpster behind the facility. Whenever it rained, stormwater mixed with the dusts, forming a slurry which ran off-site. Soil testing of a nearby stream bank showed high levels of lead, cadmium and mercury. The contaminant source was determined to be the dumpster run-off. The manufacturer was responsible for cleanup costs exceeding $250,000.

Expensive Excavation

A manufacturer began expansion of the production line area. During excavation, oily soils with a “petroleum” odor were discovered. Further investigation uncovered an old, undocumented sludge drying pit which the previous owner used back in the 1940s. The manufacturer had to remove and remediate the soils at his expense. Cleanup costs exceeded $400,000.

Violent Reaction

A manufacturer stored a drum of caustic chemicals next to a drum of highly reactive acid. When a forklift disturbed the drums, their contents were released, causing a violent reaction. Fumes spread over neighboring properties and destroyed all the plants at the nursery next door. The nursery owner submitted a claim totaling more than $35,000 for business interruption and loss of goods.

Cracks, Crumbles And Spills

The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked and crumbling. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils and required costly excavation and removal. The total cost for investigation, removal and disposal exceeded $320,000.

Town Sues Manufacturer

An aerosol packaging plant located on a 17-acre site manufactured hair spray, spot remover and oven cleaner. Its manufacturing facility is near a river that runs through a neighboring town. The town discovered contamination in their municipal water supplies and was forced to close their wells. The town sued the packaging plant and settled for $780,000.

The examples above are intended to illustrate the wide variety of environmental exposures faced by institutions, business and industry and the many ways in which those exposures can arise. Insurance coverage in any particular case will depend upon the type of policy in effect, the terms, conditions and exclusions in any such policy and the facts of each unique situation. No representation is made that any specific insurance coverage would apply in the above examples. Please refer to the individual policy forms for specific coverage details.

Common Environmental Exposures For Manufacturers

Some common environmental exposures faced by manufacturers include:

• Air emissions from painting and plating lines, ovens, boilers and reactors. These types of emissions often include:
  • Carbon Dioxide, Nitrous Oxides (NOX) and Sulfur Dioxide
  • Particulates (heavy metals and dusts)
  • Volatile Organic Compounds (VOCs)
• Current operations including:
  • Improperly maintained PCB-containing equipment and transformers
  • Poor housekeeping and preventive maintenance for operations equipment and pollution control equipment
  • Poor underground and aboveground tank management programs
  • Poor waste storage/handling practices
• Hazardous waste materials generated in large quantities, including:
• Drums of spent solvents, acids and caustics
• Heavy metal particulates and dusts from baghouses and electrostatic precipitators
• Sludges from wastewater treatment operations
• Necessary facility upgrades including:
  • Excavation of stained soils around production and maintenance areas
  • Secondary containment for tanks, raw materials and waste storage areas
  • Repaving or resealing of cracked concrete surfaces in production areas
• Raw materials utilized in large quantities including:
  • Acids and bases
  • Compressed gases including cyanide and hydrogen chloride
  • Diesel fuel and lubricant oils
  • Flammable paints and solvents
• Wastewaters generated from contact and non-contact cooling water, plating lines, drum cleaning, products cleaning and chemical treatments. Wastewaters generally contain:
  • Heavy metals
  • Oil and grease
  • Organic compounds

This list is intended only to outline some typical environmental exposures common to manufacturers and is not all-encompassing.