Chubb Environmental Solutions
Presented by: Angelica Cacioppo
Date: Wednesday May 15, 2013
Legal Disclaimer
This presentation is for informational purposes only and has an
edition date of March 2013.
This presentation is necessarily general in content and intended to
provide an overview of certain aspects of environmental liability
products. Claims examples are based on actual cases, composites of
actual cases, or hypothetical situations. Actual coverage is subject to
the language of the policies as issued. The material presented is not,
nor does it purport to be, a complete or exhaustive analysis of legal
liability exposures or risks and should not be relied on as legal
advice or a definitive statement of the law in any jurisdiction. For
such advice, an applicant, insured, listener or reader should consult
their own legal counsel. No liability is assumed by reason of the
information this presentation contains.
The views, information and content expressed herein are those of the
author(s) and do not necessarily represent the views of Chubb
Insurance Company of Canada or of any of The Chubb Group of
Insurance Companies (“Chubb”). Coverage may not be available in
all jurisdictions. This presentation is the property of Chubb. Any use
of this presentation without Chubb’s prior written consent is
prohibited.
Why Environmental? Gap in Coverage
Third Party Coverage Gap
Environmental coverage addresses third party BI/PD,
gradual leaks included
 GL excludes damage from “pollutants”
 Sudden & Accidental coverage provides give
back for Third Party BI/PD but in very specific
circumstances
 Difficult to meet the S&A criteria
Why Environmental? Gap in Coverage
First Party Coverage Gap
Environmental coverage provides Remediation Costs
coverage
 No first party coverage provided for pollution on
the GL Policy
 Some property policies provide small “freebie
limit” ($10-25K ) but there are numerous
restrictions and the limit is often too small to
have an impact
Environmental Remediation
Canada vs. United States
 US has EPA to strictly govern and regulate
national remediation standards on a consistent
basis
 Canadian environmental law & remediation are
decided on and implemented at the provincial
and sometimes municipal level
 What does this mean? Different standards across
all provinces and territories
*This is why the First Party Discovery Trigger is
important in Canada*
Chubb Environmental Product Snapshot
Environmental Site Liability (ESL)
Contractor’s Pollution Liability (CPL)
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Minimum Premium $10,000
Minimum Deductible $25,000
Commission 12.5%
Multi Year Term Capabilities
Large Capacity
Contractors Pollution Liability
 Covers insured’s covered operations for:
 TP claims for BI/PD from a pollution incident
 Environmental Damage from a pollution incident
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Annual & Project-Specific Capabilities
Represents 15% of our portfolio – growth area!
Occurrence and Claims Made
Coverage provided for defined covered operations
Contractors Pollution Liability
 Target Clients:
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Environmental/Remediation
Specialty (Trade)
Developer/ Re-developer
O&M Contractor
Only area we are not able to
cover is asbestos exposure
 Risks We Avoid:
 Pipeline Contractors
 Asbestos Contractors
 Hydraulic Fracturing
Contractors
Contractors Pollution Liability
 Exposure Examples:
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Improper equipment install
Site preparation and excavation
Demolition
On-site chemical or fuel spill
Improper HVAC installation
Exploration Drilling
Environmental Site Liability
 Covers a specific site for:
 TP claims for BI/PD from a pollution incident
 Remediation Costs from a pollution incident
 Pre-existing vs. New Conditions – easy as ABC+D!
 Coverage A – Pre-existing Pollution Incident
 Coverage B – New Pollution Incident
 Coverage C – Non-Owned Location
 Coverage D – Business Interruption
Environmental Site Liability
Exposures
 Real Estate:
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High exposure tenants (dry cleaner, gas station)
Mould
Tank Spills/Leaks, PCB contamination
House cleaning and maintenance chemicals
 Manufacturing:
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Fire/Explosion – water runoff
Tanks – hydraulic fluids, paints, fuels
Historical Disposal Practices
Air Emissions (NPRI Database)
Environmental Site Liability
Exposures
 Health Care/ Long Term Care Operations:
 Storage of chemicals, pathogens, mutagens,
teratogens, and bioactive materials
 Storage of acids, bases, flammables
 Air emissions (ammonia release from on-site cooling)
 Disposal/use/storage of drugs or waste
 Cross contamination of clean rooms or labs
 Medical waste on site
 Legionella
Required Underwriting Information
ESL/CPL
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Completed Chubb Application
Financial History
Operating History
Environmental Site Assessments
 Phase I & II Assessments required to provide
coverage for pre-existing conditions
 These are reports of the environmental condition of a
property (typically prepared as part of a sale/financing
agreement)
Chubb Environmental “Lite” Product Snapshot
 Envirolite:
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Min. premium $2,500
Min. deductible $5,000
Commission 15%
Multi-Year Term
Same Day Quoting
 CPL Lite:
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Min. premium$3,500
Min. deductible $10,000
Project-Specific only
<$5M in Project Revenue
Project length < 1 Year
Envirolite (mini ESL)
 Same as ESL, covers a specific site for:
 TP claims for BI/PD from a pollution incident
 Remediation Costs from a pollution incident
 Same wording as our ESL Form – meant as an
introductory product for specific operational classes
 Only differences between ESL and Envirolite:
1. Sub-limited On-Site Remediation ($100K - $1M)
2. New conditions coverage only
= Lower Deductible Options
= Lower Minimum Premium
Envirolite (mini ESL)
Target Clients
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Real Estate
Manufacturing
Retail
Institutional
Hospitals/Biotech
Clean Tech
Required Underwriting Information
 Envirolite:
 Chubb or Competitor
Application
 Number of
Sites/Addresses*
 Any above or
underground tanks*
 Summary of
operations/site
occupancies*
 CPL Lite:
 Chubb or Competitor
Application
 Project Revenue*
 Project Description*
 Project Length*
 Limits Required*
*We can provide a non-binding indication with these items
Typical Pollution Insurance Drivers
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Financial institution loan requirements
Lease agreements
Contractual obligations
Balance sheet protection
Environmental Site Liability
Mistake leads to Biohazard Waste Removal
Lab late night cleaning crew at a blood lab
mistakenly placed used needles in the dumpster
meant for unregulated trash. Biohazardous waste
service needed to be called to clean the dumpster
and remove the waste.
Lab paid biohazardous waste disposal service
$150,000 to clean out the dumpster – would have
been significantly more if the dumpster had gone to
a landfill already.
Environmental Site Liability
Mould Remediation at Class A Office Building
Mould was found in a Class A Canadian Office
building requiring significant remediation.
Claim remains open but Chubb has paid out over
$1.3M to remediate the site.
Environmental Site Liability
Property Manager Discovers Contamination
Canadian property manager discovered a large
amount of contamination as a result of a historical
dry cleaning operation on site.
Chubb offers insurance solutions to safeguard a
property manager or owner against new pollution
conditions as well as unknown existing
contamination. Remediation costs in this case were
greater than $1.2M
Environmental Site Liability
Spill Cleanup Shuts Down Building
Tank failure caused release of 1,000 gallons of
heating oil into basement of a managed building.
Contamination was widespread and damaged
tenants’ furniture in inventory. Cleanup/repair took
1 week.
Management firm was liable for $200,000 in property
damage as well as $125,000 for remediation. Firm
incurred $100,000 for business interruption and
extra expense due to loss of rent.
Contractors Pollution Liability
Freon Leak in Refrigeration System
Canadian insured serviced a refrigeration system at
a mall’s skating rink. A month later, freon escaped
the system and killed a janitor. The loss occurred in
Alabama and the claim was valued at $4-5M.
Chubb’s Contractors Pollution Liability insurance
has a current reserve on this claim of $1.25M
Contractors Pollution Liability
Drilling Contamination at a Canadian Mine Site
Canadian company performed drilling operations
using brine in the drilling process. The salt content
contaminated the area and the government was
brought in to investigate.
Remediation costs are estimated to be above
$300,000 and the company will also likely face
government fines up to $300,000.
Environmental Losses
In The News
Chubb Advantages
Experienced Underwriting
Chubb Environmental Solutions provides an
experienced team of environmental and business
professionals who develop insurance programs that
meet individual company needs.
Chubb Advantages
Loss Control Services
Our loss control recommendations can help:
 Reduce the probability of loss
 Improve the odds that, if a loss does occur, its
severity is minimized
In phone or site visits, risk engineers look for:
 Above/below ground storage tanks
 Secondary containment
 Hazardous waste/disposal practices
 Neighbouring exposures
 Management systems
Chubb Advantages
Responsive Claim Service
 Chubb has an unparalleled reputation for treating
customers fairly and providing responsive claim
service
Chubb Advantages
Enduring Financial Strength
 Chubb’s strong balance sheet and superior credit
rating from A.M. Best are assurances of our
financial strength
Thank you!