Severe Weather Can Cause Environmental Claims. Is Your Client at Risk?

By Amanda Duncan
Senior Vice President & Manager of Underwriting Division

Severe weather continues to wreak havoc across the country. The Southeastern and Midwestern regions of the United States have just endured devastating losses from a historic tornado outbreak and cleanup will take months, if not years. Excessive rainfall has caused several waterways, including the Mississippi River, to reach flood stage and thus more homes and businesses will continue to be affected. Wildfires are burning in parts of the country due to terrible drought conditions, with smoke and fumes being reported hundreds of miles away. And of course, the 2011 hurricane season has already started and it is never too early to begin storm preparations. These natural disasters cannot be prevented, and the damage they leave behind can include environmental hazards that must be handled promptly and appropriately.

The aftermath of the recent tornado outbreak has left miles of debris and destruction. This debris contains hazardous substances such as friable asbestos, lead paint chips, and toxic chemicals. Past hurricanes have destroyed manufacturing facilities, gas stations, landfills, and petrochemical plants, resulting in chemicals and waste being released into the soil and groundwater. It is still unknown how much oil remains in the Gulf of Mexico from last year’s monumental oil spill; an active hurricane season could bring unexpected pollutants to the shore which will affect beachfront properties.

Any structure affected by a flooding event can and will leave mold to grow long after the water recedes, not to mention residue from other wastes, chemicals, and fluids that are flushed out of buildings as the floodwaters rise. Residents coming back to their properties to assess the damage will also be exposed to bacteria and infections that could lead to serious illnesses. Wildfires can spread quickly and change direction before firefighters can gain control, impacting any facility in its path. Should the fire come into contact with chemicals or other materials, pollutants may be released into the air and the ramifications of air pollution would be felt miles away.

The scenarios listed above will not be covered via a standard CGL or property policy, and the bodily injury/property damage claims will be massive.

Your clients may not think they have an environmental exposure from their daily operations, but as we all know, the weather can be unpredictable. Your client may be a property owner or manager, a manufacturer, a farmer, a doctor, a landfill owner or anything in between. It is important to note that they all have a pollution exposure. These organizations should be made aware of the coverages needed to properly protect them in the event of an environmental claim. To learn more about the insurance products available for these risks, the best policy configurations, and how to access the right insurance markets, contact your environmental wholesaler for more information.

To aid in the disaster relief effort, visit the sites below for information on making a donation or volunteering your time in the cleanup:

American Red Cross
Feeding America
The Salvation Army

For more information, visit us online or email us.