Environmental Insurance

A World of Environmental Risks

By: Eric Collison, Vice President of National Program Development at KWIG

Whether you realize it or not, we live in a world of environmental risks. Pollutants, chemicals, bacteria and toxic waste materials are all around us. 

Hurricanes and other natural catastrophes often trigger uncontrolled releases of liquid fuels, cleaning fluids and other toxic chemicals from damaged cars, boats, buildings, containers and tanks. For instance, after Hurricane Harvey ravaged through Houston, reporters recorded more than a hundred Harvey-related releases on land, water and in the air.  Benzene, vinyl chloride, butadiene and other known human carcinogens were among the industrial toxic substances released into surrounding neighborhoods and waterways following Harvey’s torrential rains.

Gas stations constantly face the risk of liquid fuel leaks. Likewise, companies transporting liquid fuels or hazardous waste run the risk of having an accident or a spill in transit. These explosive accidents are not only dangerous for those involved, but also expose the surrounding area to the leaked fuel and toxic chemicals. 

Contractors deal with a variety of environmental risks and exposures with every construction site — from water intrusion provoking mold growth to inadvertent damage to tanks or pipelines. Golf courses use hundreds of gallons of water for maintenance of the grounds. The resulting runoff can pick up contaminants, such as pesticides and fertilizers, leading to groundwater pollution. 

Hotels and resorts also face an array of environmental exposures. Just storing laundry and cleaning chemicals as well as chlorine and other chemicals for maintaining pools and hot tubs puts them at risk. Plus, pools and hot tubs, if not properly maintained, are breeding grounds for Legionella bacteria. When inhaled, Legionella bacteria can lead to both Legionnaires’ disease and Pontiac fever. In 2019, a Legionnaires outbreak shut down the Sheraton Atlanta on Courtland Street. The Sheraton lost more than $1 million in gross revenue due to the month-long shutdown. 

After fiascos like the above occur, the EPA and other organizations get involved to ensure a quick and effective clean up that minimizes the effects on human health and the environment. And, unfortunately, these cleanup costs can be astronomical. This is why having Environmental insurance is so imperative for businesses of all types. 

What is Environmental Insurance? 

Environmental insurance, also known as pollution liability insurance, provides coverage for losses or damages resulting from unexpected releases of pollutants. These losses or damages usually arise in the form of claims against the insured for bodily injury, property damage, cleanup costs, and business interruption. Environmental insurance is typically excluded from general liability and property insurance policies. Consequently, some businesses mistakenly assume they are covered while others opt out of purchasing the additional coverage. 

In a world teeming with environmental risks, market experts predict the frequency and severity of environmental claims to increase. What is driving this rise in environmental claims? Experts point to the enhanced access to information that social media provides, our country’s aging infrastructure, social inflation, and increasing regulatory imposed fines, penalties and remediation. This heightened level of awareness of environmental threats is just another reason to secure specialized environmental insurance coverage for the risks your business faces.   

Contact your Experts in the Unexpected for Environmental Insurance

Formulating an effective environmental insurance policy requires thorough analysis of your business’s unique risks and exposures. Your experts at Kemmons Wilson Insurance Group are here to assess the environmental risks your business faces. We ask deliberate questions to better understand the problem at hand. Then, we work with our environmental insurance specialists to tailor an environmental insurance policy that mitigates the consequences of an environmental incident. Contact your experts in the unexpected for environmental insurance coverage.