The Problem: A dry cleaning facility leased commercial space from a property owner insured by XL Insurance. 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. Claims Adminstrators 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 as well as defense fees and expenses.

The Benefits: The installation of an interim remedial system served to reduce the insured’s liability and damages and was viewed favorably by regulatory officials.

Claims Adminstrators 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.

Chemical Contaminants Traced To Warehouse

The Problem: XL Insurance insured a real estate firm that owned a large warehouse. The warehouse tenant stored a variety of chemicals in the warehouse. A Phase I assessment performed on a parcel of vacant land neighboring the warehouse showed chemical contaminants whose origin was traced to the warehouse. Cracks in the reinforced concrete floor of the warehouse had allowed leaking chemicals to escape, causing extensive soil and groundwater contamination of the neighboring property. The owner of the vacant land filed suit to recover the costs to remediate his property, as well as money lost when a pending sale of the property was cancelled as a result of the contamination.

The Response: A claims counsel and environmental consultant flew to the site of the incident to ensure a thorough investigation of the claim, including a review of invoices to ensure the remediation work was performed at a reasonable price. The invoice review turned up several excessive charges that XL Insurance was able to discharge. Working proactively with the claimant, XL Insurance negotiated a settlement that satisfied the claimant as well as the insured. Risk Control staff was even able to assist the client in developing and implementing procedures to minimize their risks of similar incidents in the future.

The property owner’s Pollution and Remediation Legal Liability (PARLL) policy responded to cover the majority of the costs arising from the cleanup of both his and the claimant’s properties.

The Benefits: XL Insurance’s prompt response, experience with managing environmental cleanups, and proactive dialogue with the claimant saved this client time and money by reducing excessive remediation costs and avoiding litigation. The insured’s property was cleaned up and they were able to continue their business operations. XL Insurance’s expert in-house loss control staff assisted the insured with services to prevent similar incidents.

Minimizing Disruption Of Rental Income

The Problem: The tenant of a property owner/manager insured by XL Insurance complained of dust conditions in their work area. Sampling revealed that the dust was laden with heavy metals (arsenic, cadmium, chromium and lead). The contamination appeared to be the result of the prior owner’s operation at the site. Even though the prior owner had indemnified the current owner, they were slow to respond to requests for cleanup of the site.

The Response: To reduce the insured’s liability/damages and to return the tenant to its operations, Claims Administrators retained an environmental consultant/contractor to clean up the dust. The insured’s Pollution and Remediation Legal Liability (PARLL) policy afforded coverage for investigation and remediation of the dust conditions. Then Claims assisted the owner in pursuing the prior owner to cause them to honor the obligation contained within their environmental indemnity.

The Benefit: Claims Adminstrators prompt retention of a qualified environmental consultant/contractor and coordination of the investigation and remediation minimized the disruption of the insured’s rental income.

Carbon Monoxide Release Results In Death

The Problem: A property management corporation insured by XL Insurance managed a large apartment complex. A carbon monoxide release caused by faulty heating and ventilation systems caused the deaths of two tenants and serious injury to three others. The injured tenants and deceased tenants’ families began filing lawsuits, leaving the property management company subject to hundreds of thousands of dollars in bodily injury claims not covered under the absolute pollution exclusion of their General Liability policy.

The Response: Experienced environmental consultants from XL Insurance were immediately dispatched to the site of the incident to conduct an investigation to accurately determine the client’s liability. The investigation revealed that faulty work done by an HVAC contractor would mitigate some of the property management corporation’s liability. Claims counsel also engaged in proactive dialogue with the claimants to ensure that a fair and amicable settlement would be reached.

The property management corporation’s Pollution and Remediation Legal Liability (PARLL) policy responded to cover the majority of the bodily injury claims.

The Benefits: XL Insurance's immediate response and proactive discussion with the claimants avoided what could have turned into lengthy and costly litigation. The expertise of XL Insurance's environmental consultants ensured that the insured was held accountable only for their fair share of the damages. XL Insurance's comprehensive pollution policy responded to incur the majority of the costs resulting from the bodily injury claims.