Stuart alexander property conference Env I L simon

Environmental Insurance Presentation for Stuart Alexander Training Seminar 1st June, 2006Simon White, Senior Environmental Underwriter : 

Environmental Insurance Presentation for Stuart Alexander Training Seminar 1st June, 2006 Simon White, Senior Environmental Underwriter

Agenda: 

Agenda The Law What’s covered already……. or what is not! A pollution claim Why EIL? Who is XL?

Slide3: 

UK Environmental Legislation Part IIA of Environmental Protection Act 1990 Local Authorities – duty of care to inspect areas and identify “contaminated land” Land is contaminated if it appears to the local authority to be in such condition, by reason of substances in, on or under it, that: Significant harm is being caused or there is significant possibility of such harm Pollution of controlled waters is being, or is likely to be caused. Identifies appropriate persons as : Caused or knowingly permitted contamination– Class A or where no Class A person can be found then - Owner or Occupier – Class B

Slide4: 

UK Environmental Legislation Others Integrated Pollution Prevention and Control Waste Regulations Planning Regime – PPS 23 Water Resources Act 1991 European Environmental Liability Directive – must be incorporated into national law by 30th April 2007 Waste Electrical and Electronic Equipment Directive and others

Slide5: 

UK Environmental Legislation What cover do you have? Property Public Liability

Slide6: 

Property Policies Cleanup costs – are they or aren’t they covered King v Brandywine Reinsurance Company (Court of Appeal. March 2005) Reinsurance claims arising from the Exxon Valdez oil spill Section 1 of the policy (Loss of or Damage to Property) Insurer argued that clean up was a “removal of debris” Court ruled “debris” was not the natural way in which to describe spilled oil or pollution from spilled oil

Slide7: 

Public Liability Policies Cleanup costs – are they or aren’t they covered Some cases ruled cleanup costs covered, some (more recent) have stated they are not. Yorkshire Water Services Ltd v. Sun Alliance & London Insurance plc (High Court, 1998): Ballard v. Tomlinson (Court of Appeal, 1885) Voluntary cleanup – Part IIa. Environmental Protection Act. PL policy – insured is not “legally liable” unless liability has been ascertained and quantified by judgment, arbitration award or settlement. To trigger a PL policy a remediation notice is needed On-Site Cleanup Costs Typical owned property exclusion bars cover for damage to property owned or occupied by or in the care, custody or control of the assured or of any servant of the assured. Gradual Pollution Jan de Nul (UK) Ltd. V. N.V. Royale Belge (High Court, 2000): Contamination over “a period of many weeks” was not “sudden”

Slide9: 

Sources of a Pollution Condition Sources of a Pollution Condition Unknown historic contamination arising from: Air emissions Waste disposal Leaks / spills / cracking / corrosion from: Above & underground tanks Above & underground pipes Fuel points Loading/unloading of vehicles Drains / sewage systems The operations themselves – poor housekeeping / disposal practices Use of hydraulic and lubricating oils from process equipment Use of hazardous materials on-site – solvents, toxic chemicals Storage of hazardous raw materials

Slide10: 

Environmental Claim

Slide11: 

Environmental Claim Pollution condition: means the discharge, dispersal, release, seepage, migration, or escape of smoke, soot, vapours, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials, including medical, infectious and pathological wastes, low level radioactive waste/material or other irritants, contaminants or pollutants into or upon land, or structures thereupon the atmosphere or any watercourse or body of water including groundwater.

Slide12: 

Environmental Claim Types of Damages Pollution of land, buildings, private property (i.e. cars) and groundwater Damage to 3rd party property: - physical property i.e. buildings crops, livestock - Loss of use of property i.e. no longer able to abstract water from the ground Bodily Injury to 3rd parties Destruction of surface waters or ecological areas

Slide13: 

PARLL Policy Designed to cover: Coverage A – Pollution Legal Liability: 3rd Party Bodily Injury / Property Damage 3rd Party Property Damage cover includes diminution in value and business interruption. Coverage B – Remediation Legal Liability: First and 3rd party Cleanup, required by the Government Restoration costs of 1st Party Property covered under Remedial Expense. Remediation Expense that the Insured is liable for, includes, but is not limited to: Remediation in accordance with a notification or remediation notice issued under the contaminated land regime. Remediation in accordance with, written requests under the Water Resources Act 1991 or works notices under the Anti-Pollution Works Regulations 1999. Asbestos and Lead based paint in soil, groundwater and surface waters. Coverage C – Legal Defence Expense Additional key coverage's which can be considered: First Party Business Interruption – loss of rental income

XL EnvironmentalKey Facts: 

XL Environmental Key Facts Leader in the integration of environmental insurance, risk control and claims administration Founded in Exton, Pennsylvania in the US 1979 Integrated Environmental Risk Management specialist in the XL Capital group Opened operations in London, October 1992 ECS Acquired by XL Capital June 1999 Opened operation in Paris, September 2005

Thank You for your time and patience: 

Thank You for your time and patience Should you have any questions please contact Simon White on Telephone: 020 7933 7669 Fax: 020 7469 1072 E-mail: simon.white@xlgroup.com