The last phone call an agent wants to get is notification that a claim is not covered under a policy. Claims can be denied for a variety of reasons. Those reasons can include a designated operations endorsement or exclusion which can limit your client’s coverage to damages arising only out of services listed on the policy. If the insured is performing services that are not listed on the policy or on the application, there may be exposures that your policy is not addressing, such as site pollution or transportation pollution liability. It is important to do a thorough review of all operations at renewal so any issues can be addressed.
Beacon Hill recently reviewed coverage for the renewal of a large hazardous materials remediation contractor on the east coast. In the course of the renewal discussions, the agent discovered that the insured was bringing water removed from jobsites back to their premises, storing the water in above ground storage tanks, and treating the water before releasing it back into the county water system. The insured has all the proper permits to do this, but these services were not listed on the applications, nor were the tanks.
Above ground storage tank leaks or releases could impact the insured’s own site, neighboring properties and water supplies for a large area. Leaks could require costly cleanup, possibly fines and damages assessed by environmental regulations, cause damage to property and cause injury. Clean up of the leaks can include the cost to remediate the soil, groundwater, and restoration of wildlife habitat and populations damaged by the leak, etc. These damages can reach hundreds of thousands of dollars.
The insured also faces an exposure from transporting the water back to their plant. If an auto accident occurs while transporting the water, this could result in damages to vehicles, property as well as injury to people and wildlife in the area.
As the current policy did not address the tank exposure or the removal and treatment of water from jobsites, had there been a spill, a leak or release from the tanks that impacted the insured’s property or a neighboring property, the loss may not have been covered.
Beacon Hill was able to quote the renewal policy with added endorsements to address risks posed by the storage and transportation of water for damage to the insured’s property, third party property and injury to others.
It’s important to discuss any new or changing operations with your clients on a regular basis to prevent any potential gaps in coverage. For more information or discuss a specific account, give us a call at (800) 596-2156 or email us.