ADJUSTERS INTERNAT IONAL . COM 7 A D J U S T I N G T O D A Y Instead, pollutant cleanup and removal from land or water, when caused by or resulting from a cause of loss covered by the policy, is covered separately as additional coverage with its own limit. Unlike debris removal coverage, this is a separate amount of insurance, apart from the property insurance limit. It applies to the sum of all covered expenses for each 12-month period of the policy, rather than per occurrence. For added premium, the amount can be increased according to the assessed needs. “Pollutants” is a defined term in the policy. It means “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.” Any insured handling or exposed to any materials that fall within any of these categories should look closely at this exposure, evaluate the possible extent of potential loss, and consider the possible need to increase the limit to a more appropriate figure for their possible exposure. Not covered are costs to test for, monitor, or assess the existence, concentration or effects of pollutants, but testing performed Debris Removal and Pollution Damage Losses: They Really Happen! Debris removal and pollution damage losses don’t just happen in theory. They are real. And they can be expensive. • During a Midwest summer flood, an industrial plant had toxic chemicals stored in tanks. The tanks were floated off their bases by the flood, spilling the toxic contents and contaminating adjacent buildings. The cost of the toxic cleanup after the flood subsided was $200,000. • Several gasoline stations have had losses in which leaking underground storage tanks produced substantial debris removal and toxic cleanup damages. Losses of $250,000 or more are not uncommon in these cases. As the next examples illustrate, the process of removing hazardous materials can sometimes be more costly than installing the materials themselves. • A total fire loss to a bowling alley produced a $200,000 debris removal loss in addition to the direct property damage—as a result of the building being riddled with asbestos. • A condominium association that suffered $250,000 worth of damage to an asbestos roof spent approximately $1 million to dispose of the damaged asbestos—and their loss was only partially covered. • A fire loss to a ski lodge, with a replacement cost in excess of the property insurance limit, also resulted in a substantial debris removal loss. The policy provided debris removal coverage in addition to the property coverage limit, but with the provision that the full limit of the replacement cost insurance be paid first. We recommend to insurance buyers and their agents or brokers to examine a policy’s property insurance and debris removal and pollution limits in light of the magnitude of these potential loss exposures. – Patrick W. Bickford, SPPA (These are examples of direct property losses only. They do not include general liability exposures which often accompany such losses but are outside the scope of this discussion.)
RkJQdWJsaXNoZXIy NjIxNjMz