Scenario: A closed Air Force Base with several areas of contamination was being leased to various tenants. A manufacturer was concerned that it might be held responsible for the contamination under its location if their current activities and operations exacerbated the known contamination.

Solution: The use of a Pollution and Remediation Legal Liability (PARLL) policy at $10 million limits of liability. Risk Control assisted the manufacturer by providing recommendations for reducing their potential for liability for the overall contamination problem.

Scenario: A major life insurance company wanted to protect its real estate investment portfolio, which exceeded 10 million square feet of buildings, from environmental exposures.

Solution: XL Environmental Underwriting recommended that the client consider covering environmental exposures in the client’s loan portfolio. A blanket Pollution and Remediation Legal Liability (PARLL) policy was provided covering the client’s real estate portfolio and loan portfolio including all future investments.

Scenario: As part of a loan requirement, a bank asked a new warehouse owner to provide a $2 million limit of liability for a 12-acre parcel of land, formerly used for manufacturing of electronic components.

Solution: XL Environmental Underwriting was able to provide a quotation within a 24-hour period due to the time constraints on the property closing. Pollution and Remediation Legal Liability (PARLL) was purchased at $5 million limits of liability for three years with a $25,000 self-insured retention, and the lender was named as an additional insured party.

Scenario: A manufacturer began expansion of the production line area at their facility. During excavation, oily soils with a "petroleum" odor were discovered.  An XL environmental consultant visited the site to determine the extent of contamination and to retain a qualified remediation contractor for the cleanup. Further investigation uncovered an old, undocumented sludge-drying pit, which the previous owner used back in the 1940s.

Solution: The manufacturer’s Pollution and Remediation Legal Liability (PARLL) policy responded to cover the cost of removing and remediating the soils. The cleanup costs exceeded $200,000. XL's fast response ensured minimal disruption of the manufacturer’s operations and kept the expansion project on schedule. The manufacturer was able to meet customers’ contracts on time.

Scenario: A petroleum distributor insured by XL Environmental was placed on notice of a release from a gas station operated by one of its tenants. The release was discovered during excavation activities at a site next door. The distributor faced a costly investigation and cleanup, and increased scrutiny from the environmental authorities.

Solution: XL Environmental Claims assisted the insured in retaining a qualified environmental consultant who prepared an appropriate investigation plan acceptable to the regulators. The investigation revealed that the contamination, although extensive, did not pose a risk to nearby receptors. Therefore a less expensive soil cleanup and risk-based response, which allowed some contamination to remain because it did not pose a risk to others, were permitted by the regulators. The petroleum distributor’s Pollution and Remediation Legal Liability (PARLL) policy will respond to the costs of the investigation and cleanup, which amounted to $175,000. XL’s experience in managing environmental claims enabled it to choose an appropriate environmental consultant who was trusted by the regulators, and who did not try to take advantage of the situation and recommend an extensive cleanup. The resulting quick response to the claim avoided unnecessary cleanup costs as well as fines and penalties.

Scenario: XL Environmental insured a real estate firm that owned a large warehouse where a tenant stored a variety of chemicals. A Phase I assessment performed on a parcel of vacant land neighboring the warehouse showed chemical contaminants whose origin was traced to the warehouse. Cracks in the reinforced concrete floor of the warehouse had allowed leaking chemicals to escape, causing extensive soil and groundwater contamination of the neighboring property. The owner of the vacant land filed suit to recover the costs to remediate his property, as well as money lost when a pending sale of the property was cancel as a result of the contamination.

Solution: Claims counsel and an environmental consultant from XL Environmental flew to the site of the incident to ensure a thorough investigation of the claim, including a review of invoices to ensure the remediation work was performed at a reasonable price. The invoice review turned up several excessive charges that XL was able to discharge. Working proactively with the claimant, XL negotiated a settlement that satisfied the claimant as well as the insured.  XL's Risk Control staff was even able to assist the client in developing and implementing procedures to minimize their risks of similar incidents in the future.  The property owner’s Pollution and Remediation Legal Liability (PARLL) policy responded to cover the majority of the costs arising from the cleanup of both his and the claimant’s properties.

Scenario: The tenant of a property owner/manager insured by XL Environmental complained of dust conditions in their work area. Sampling revealed that the dust was laden with heavy metals (arsenic, cadmium, chromium and lead). The contamination appeared to be the result of the prior owner’s operation at the site. Even though the prior owner had indemnified the current owner, they were slow to respond to requests for cleanup of the site.

Solution: To reduce the insured’s liability/damages and to return the tenant to its operations, XL retained an environmental consultant/contractor to clean up the dust. The insured’s Pollution and Remediation Legal Liability (PARLL) policy afforded coverage for investigation and remediation of the dust conditions. XL’s in-house attorneys assisted the owner in pursuing the prior owner to ensure they honored the obligation contained within their environmental indemnity.

Scenario: A gas utility provider purchased property to expand operations. A Phase I Assessment failed to discover any issues. Upon excavating soils for a new building, petroleum contaminated soils were unearthed. Further investigation uncovered an old, undocumented storage tank dating back to the 1950s.

Solution: XL sent an environmental engineer to the site to oversee cleanup activities and an XL claims counsel worked with the insured to recover cleanup costs from the former property owner.  The insured’s a Pollution and Remediation Legal Liability (PARLL) policy responded to the cover the cost of soil remediation, which exceeded $220,000. XL’s swift response and expertise in overseeing cleanup activities minimized delays to the insured’s expansion project and the associated extra expenses.

Scenario: A real estate developer insured by XL Environmental was planning to construct a luxury hotel with an underground parking garage on the site of a former apartment building. During construction, soil contamination was discovered in one area of the site. Initial investigation revealed the presence of petroleum. A brick cistern was unearthed, which appeared to be the source of contamination. No historical documentation or site plans reviewed during a Phase I Site Assessment of the property revealed the presence of the cistern.

The remediation would entail excavation and off-site disposal of the contaminated soil. Disposal fees, which were estimated at $60,000 to $80,000, were in excess of the original scope of work. During excavation of the contaminated soil, it became evident that groundwater likely would be impacted as well, which would require the installation of groundwater monitoring wells at a cost of approximately $30,000.

Solution: XL provided oversight of the remediation, with an eye toward keeping construction delays to a minimum and limiting the insured’s potential for long-term liability. The insured’s Pollution and Remediation Legal Liability (PARLL) policy responded to cover the costs of construction delays, disposal costs, analytical testing, legal fees, etc., which exceeded $350,000.

Scenario: A 15-acre site was formerly occupied by a paint manufacturing facility and plans for redevelopment included the construction of a retail outlet center. The known cleanup costs were estimated to be approximately $600,000. The retail outlet chain parent company wanted to cap future remediation costs and protect themselves from potential third-party claims during construction.

Solution: XL Environmental provided a Pollution & Remediation Legal Liability (PARLL) policy with limits of $4 million. Remediation Stop Loss (RSL) coverage was structured with $1 million in limits over the $600,000 cleanup and a $100,000 buffer self-insured retention.

Scenario: A contractor insured by XL was sandblasting an aboveground storage tank at a facility, and in the process, released residuum from the blasting onto the property of neighboring homeowners. The material was contaminated with PCBs and lead. The property owners filed claims against the facility owner and the contractor for contamination of their properties and potential for future illness.

Solution: XL hired defense counsel to protect the insured’s interest. An XL claims counsel immediately met with representatives of the facility owner’s insurance company with the goal of settling the claim and limiting litigation.  The insured’s Contractor’s Pollution Legal Liability policy responded to cover its portion of third-party claims and remediation of the facility, which exceeded $200,000.  XL’s fast response and legal expertise helped to prevent lengthy and costly litigation and kept the insured’s liability to a minimum.

Scenario: A general contractor handling a major commercial building project subcontracted an underground storage tank (UST) contractor insured by XL Environmental to remove a UST and install an aboveground storage tank (AST). After successfully completing the job, it turned out that the XL insured had failed to obtain the required permits. When the general contractor was fined due to the lack of proper permitting, they in turn filed suit against the UST contractor to collect the fines.

Solution: XL conducted a thorough investigation of the claim, finding out in depositions that the general contractor (the claimant) had coerced the UST contractor into performing the job without the necessary permits in order to meet a tight building deadline. While the UST contractor will maintain some liability for its actions, it will be mitigated because of the coercion at the hands of the claimant.  The insured's Contractor’s Pollution Legal Liability (CPL) policy responded to pay for the expenses associated with the fine.  XL's expertise in obtaining depositions and analyzing the insured’s documentation supporting the general contractor’s coercion was instrumental in diminishing the client’s liability. Without a full and thorough investigation of the claim, the client would have borne significantly greater expense to resolve the claim.