No Business Is Safe from Environmental Disaster

Protect Your Assets and Future with Pollution Liability Insurance

(ARA) - Fears that the environment will suffer under the Republican administration are misplaced, say the world's leading pollution liability experts. Thanks to privatization and the shift to state enforcement, pollution is being rapidly uncovered. Good news for Mother Nature -- devastating news for those footing the clean-up bill.

The fact is, nearly every business -- from farms and schools, to contractors and developers, to printers and manufacturers--is a potential polluter facing third-party liability claims, clean-up costs, business interruption, and damaging publicity. That's according to the environmental insurance experts at Assurex International, the world's largest privately held risk management and commercial insurance brokerage group.

Ironically, business owners who devote considerable resources building healthy organizations often risk it all by neglecting pollution liability insurance coverage. They mistakenly believe their companies are free of environmental exposures, or that pollution coverage is unavailable or unaffordable. Both assumptions are false and potentially costly to businesses large and small.

Former and current land and business owners, waste generators and transporters all can be held liable for environmental exposures. "Acquire a company that buried tanks 15 years ago, construct homes on arsenic-laced farmland, build a school on toxic land, and you'll share liability with the polluter--unless you have environmental liability insurance," notes Assurex President and CEO Thomas W. Harvey.

Environmental insurance helps offset costs associated with pollution clean-up, business interruption, lawsuits, construction delays and property value diminution. "Environmental insurance can mean the difference between business survival and devastating financial loss," says Harvey.

You don't have to be a chemical manufacturer or other big operation to be at risk of environmental liability. Businesses large and small are potential polluters. For a small, neighborhood grocery store, just one broken bottle of ammonia could release fumes, overcome shoppers, and create potential liability problems.

On a somewhat larger scale, take the case of the entrepreneur who bought an aging fast-food restaurant. While remodeling, the new owner discovered underground storage tanks buried 20 years earlier when a gas station sat on the site. The new and previous owners shared responsibility for removing the tanks at a cost of $20,000 to $1 million-plus. With an environmental liability insurance policy in place, clean-up costs might be covered.

Large organizations experience environmental surprises, too. When construction began on a $200 million school complex in Los Angeles, officials had no idea their state-of-the-art learning center sat on toxic land. Once environmental contamination was uncovered, construction on the nearly complete building stopped. Had a site survey been conducted prior to construction, this costly disaster might have been avoided.

While a site survey should be part of any merger, acquisition or real estate transaction, surveys sometimes fail to unearth exposures. Environmental insurance, on the other hand, is a certain way to transfer risks and mitigate financial losses.

According to Brad Maurer, an environmental insurance expert with New York City-based Assurex Partner Frenkel & Co., most business executives would be surprised to learn what's covered by an environmental insurance policy. "Insurance can cover existing exposures today, as well as future risks. Even known environmental conditions may be covered, if surveys indicate there is no immediate health threat," notes Maurer.

"Environmental insurance policies are becoming popular tools for real estate and business transactions," adds Maurer. "Environmental insurance allows buyers and sellers to transfer a deal's environmental risk to an insurer, rather than wasting time and money negotiating who will bear and fund the risk."

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