Ontario Higher Education Risk Management Symposium CURIE Pollution Coverage Property & Liability May 23-24, 2013 University of Guelph
Property (First Party) Pollution Coverage The property policy contains two pollution related endorsements that provide coverage for pollution cleanup arising from an insured physical damage loss. The two endorsements are contained in both the CURIE Primary Property Policy and the Excess Property Policy. 2
Property (First Party) Pollution Coverage The first endorsement – Pollution Endorsement – is new for 2013 and was agreed to by all excess program Insurers/Reinsurers Property Insurance Endorsement No 005 Pollution Endorsement This policy does not insure against loss or damage caused by, resulting from, contributed to or made worse by actual, alleged or threatened release, discharge, escape or disposal of contaminants or pollutions, unless as a consequence of a physical damage of the type insured by this policy. 3
Property (First Party) Pollution Coverage The second endorsement – Asbestos Endorsement – is also new on the CURIE 2013 policy. It restricts coverage for Asbestos clean up to Named Perils and only covers that part of the Asbestos which has been physically damaged by one of the Named Perils listed. PROPERTY INSURANCE GENERAL ENDORSEMENT NO 006 ASBESTOS ENDORSEMENT A. This policy insures asbestos physically incorporated in an insured building or structure, and then only that part of the asbestos which has been physically damaged during the policy period by one of these Listed Perils: Fire; Explosion; Lightning; Windstorm; Hail; Direct impact of vehicle, aircraft or vessel; Riot or civil commotion; Vandalism or malicious mischief; or accidental discharge of fire protective equipment. 4
Property (First Party) Pollution Coverage ENDORSEMENT NO 006 (cont’d) This coverage is subject to all limitations in the policy to which this endorsement is attached and, in addition, to each of the following specific limitations: 1. The said building or structure must be insured under this policy for damage by that Listed Peril. 2. The Listed Peril must be the immediate, sole cause of the damage to the asbestos. 3. The Insured must report to Underwriters the existence and cost of the damage as soon as practicable after the Listed Peril first damaged the asbestos. However this policy does not insure any such damage first reported to Underwriters more than 12 (twelve) months after the expiration, or termination, of the policy period. 5
Property (First Party) Pollution Coverage ENDORSEMENT NO 006 (cont’d) 4. Insurance under this policy in respect of asbestos shall not include any sum relating to: i. Any faults in the design, manufacture or installation of the asbestos. ii. Asbestos not physically damaged by the Listed Peril including any governmental or regulatory authority direction or request of whatsoever nature relating to undamaged asbestos. B. Except as set forth in the foregoing Section A, this policy does not insure asbestos or any sum relating thereto, Except as otherwise provided by this endorsement, all other terms, conditions and exclusions of the policy shall have full force and effect. 6
Property (First Party) Pollution Coverage Mold and Fungi While not a pollutant, mold and fungi get lumped in with pollution coverage discussions. This exclusion is also contained in the Excess Property Policy. 2.2 Perils Excluded part (c) (c) Loss or damage caused by or resulting from dampness or dryness of atmosphere, mould or fungi, wet or dry rot, heating, evaporation, marring, scratching, rust or corrosion, contamination, change in colour or finish unless such loss or damage to the property insured is caused directly by a peril not otherwise excluded herein; 7
Property Pollution Coverage Summary 1. Coverage for pollution clean up as a result of physical damage to property insured except 2. Asbestos clean up as a result of named perils physical damage to insured property 3. Mold and Fungi excluded 8
Liability (Third Party) Pollution Coverage CURIE Primary Policy ($5 Million) The Pollution Coverage section is a very lengthy standard industry pollution section (mandatory language). The important part is that the whole clause is substituted by the exception (as highlighted) this removes the 120 hour detection, 120 hour reporting requirement. 9
Liability (Third Party) Pollution Coverage 3.7 POLLUTION LIABILITY EXCLUSION This insurance does not apply to: a) "Bodily Injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal or escape of pollutants: (i) at or from premises owned, rented or occupied by the Insured; (ii) at or from any site or location used by the Insured or others for the handling, storage, disposal, processing or treatment of waste (iii) which are at any time transported, handled, stored, treated, disposed of, or processed as waste by or for the Insured or any person or organization for whom the Insured may be legally liable; (iv) at or from any site or location on which the insured or any contractors or subcontractors working directly or indirectly on behalf of the Insured are performing operations: 1) if the pollutants are brought on or to the site or location in connection with such operations; or 2) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, the pollutants. b) Any loss, cost, or expense arising out of any governmental direction or request that the Insured test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants. 10
Liability (Third Party) Pollution Coverage POLLUTION LIABILITY (cont’d) Sub-paragraphs (i) and (iv) (1) of paragraph (a) of this exclusion do not apply to "bodily injury" or "property damage" caused by: (a) heat, smoke or fumes from a hostile fire. As used in this exclusion, a "hostile fire" means one which becomes uncontrollable or breaks out from where it was intended to be. (b) an unexpected or unintentional discharge, dispersal, release or escape of pollutants provided such discharge, dispersal, release or escape of pollutants: (1) results in the injurious presence of pollutants in or upon land, the atmosphere, drainage or sewage system, watercourse or body of water; and (2) is detected within 120 hours after the commencement of the discharge, dispersal, release or escape; and (3) is reported to C.U.R.I.E. within 120 hours of being detected; and (4) does not occur in a quantity or with a quality that is routine or usual to the business of the Insured. "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapour, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. 11
Liability (Third Party) Pollution Coverage POLLUTION LIABILITY (cont’d) It is agreed that this entire exclusion shall not apply to any actual, alleged or threatened discharge, dispersal, release or escape which is sudden and accidental, subject, however, to the reduced Limits of Liability as stated hereunder: It is agreed that the Limits of Liability stated in item 3 of the Declarations, are amended to read as follows in respect to liability for the actual, alleged or threatened discharge, dispersal, release or escape of any solid, liquid, gaseous, or thermal irritant or contaminant, including but not limited to smoke, vapour, soot, fumes, acids, alkalis, chemicals and waste, including as waste, materials to be recycled, reconditioned or reclaimed, which is sudden and accidental: 3. Limit of Liability $5,000,000 per occurrence $5,000,000 aggregate for Products Hazard 12
Liability (Third Party) Pollution Coverage First Excess Liability Policy - $20 Million Excess of $5 Million This policy contains the standard IBC 120 hour detection 120 hour reporting requirement It starts out by taking cover away and the giving it back (with conditions). 13
Liability (Third Party) Pollution Coverage FIRST EXCESS LIABILITY INSURANCE GENERAL ENDORSEMENT NO 007 It is agreed that item 3(a) Environmental Exclusion, is deleted and replaced by the following: Limited Pollution Liability Coverage Exclusion This Policy does not apply to: A. "Bodily injury", "personal injury", or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants: 1) At or from premises owned, rented or occupied by an Insured; 2) At or from any site or location used by or for an Insured or by others for the handling, storage, disposal, processing or treatment of waste; 3) Which are at any time transported, handled, stored, treated, disposed of, or processed as waste by or for an Insured or any person or organization for whom the Insured may be legally responsible; or 4) At or from any site or location on which an Insured or any contractors, or subcontractors working directly or indirectly Insured are performing operations: a) on behalf of an if the pollutants are brought on or to the site or location in connection with such operations; or b) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize the pollutants. 14
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