Glossary of Environmental & Insurance TermsAboveground Storage Tank (AST)
Any tank or other container that is aboveground, partially buried, bunkered, or in a subterranean vault. This includes floating fuel systems.*
An individual or entity that is not automatically included as an insured under the policy of another, but for whom the named insured's policy provides a certain degree of protection.
An insurance policy that is written and issued in a specific locale, by an insurer authorized to transact business under the confines of the local insurance laws.
A mineral fiber that can pollute air or water and cause cancer or asbestosis when inhaled.
Asbestos Containing Material (ACM)
When referring to school buildings, means any materials or product which contains more than one percent asbestos.*
The use of living organisms (e.g., bacteria) to remove pollutants from soil, water, and wastewater.
Certified Industrial Hygienist
Through education and experience a Certified Industrial Hygienist is able to recognize health hazards, test for those hazards, determine if there is a risk to human health, and recommend protection from the recognized health hazard.*
Claims Made Based Coverage
The trigger of coverage is a claim being made and reported during the policy period; therefore, insurance coverage is applicable only if the insured files a claim with the insurer during the period expressed in the policy.
The demand for benefits as provided by the policy.
Coverage for landfills and to provide long-term care of closed landfills.*
Commercial General Liability (CGL)
Provides broad protection against situations in which a business must defend itself against lawsuits or pay damages for bodily injury or property damage from third party claims.
Contingent Transportation Pollution Liability
Commonly used to refer to liability associated with the transportation of an insured’s products or wastes by a third-party carrier for hire.
Contractors Pollution Liability (CPL)
Designed for contractors to protect themselves against environmental exposures and pollution losses arising from the contractor's work.
The scope of the protection provided under a contract of an insurance policy.
Elevated Blood Level (EBL)
An elevated blood lead level in a child is defined as 10 or more micrograms of lead in a deciliter (μg/dL) of blood.**
Employee Benefit Liability
Liability of an employer for an error or omission in the administration of an employee benefit program, such as failure to advise employees of benefit programs. Coverage of this exposure is usually provided by endorsement to the General Liability policy, but may also be provided by a fiduciary liability policy.**
The release or discharge of a substance into the environment.
An addition, not a part of the original contract, which cites certain terms and which becomes a legal part of that insurance contract. Typically, it is an amendment to the policy used to add or delete coverage.
Environmental Impairment Liability (EIL)
Protects business owners from environmental accidents or issues on their premises. Also known as premises pollution or site pollution.
U.S. Environmental Protection Agency (EPA)
When Congress writes an environmental law, the EPA implements it by writing regulations. It sets national standards that states and tribes enforce through their own regulations. If they fail to meet the national standards, the EPA can help them. The EPA also enforces their own regulations, and helps companies understand the requirements.*
Emergency Response Costs
A frequent enhancement included under Contractors Pollution Liability coverage to pay for emergency cleanup costs incurred voluntarily by a contractor to mitigate the severity of a loss associated with a pollution condition caused by their work at a jobsite.
Environmental Site Assessment (ESA)
An ESA is the process that determines whether contamination is present at a site.*
Excess Limits Coverage
Provides coverage against losses in excess of a specified dollar limit.
A provision of an insurance policy or bond referring to hazards, circumstances, or property not covered by the policy.
Degree of hazard threatening a risk because of physical conditions, both external or internal.
Extended Reporting Period (ERP)
A designated period of time after a claims-made policy has expired during which a claim may be reported and coverage triggered as if the claim had been made during the policy period.
A provision of an insurance policy or bond referring to hazards, circumstances, or property not covered by the policy.
Owners and operators have to show that they have the financial resources to clean up a site if a release occurs, correct environmental damage, and compensate third parties for injury to their property or themselves. The amount of coverage required depends on the type and size of the business.*
A specific situation that increases the probability of the occurrence of loss arising from an exposure.
Indoor Air Quality (IAQ)
A term referring to the air quality within and around buildings and structures, especially as it relates to the health and comfort of building occupants.*
Institute of Inspection, Cleaning & Restoration Certification (IICRC)
A standard-setting, non-profit organization for cleaning and restoration industries, widely recognized for educating professionals in creating healthier indoor living environments.
Lead-Based Paint (LBP)
Dried paint film that has a lead content exceeding 1.0 mg/cm² or 0.5 percent (5,000 parts per million (ppm)) by weight.
Material Change in Risk
The insured must notify the Company, in writing, within sixty (60) days of any change in operations at the covered location(s) which materially increases the risk from that originally assumed by the Company at policy inception.
Microbial Substance means any substance that reproduces through release of spores or the splitting of cells including but not limited to bacteria, protozoa, fungi, chlamydiae, rickkettsiae, whether or not the microbial substance is living. Fungi means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or byproducts produced or released by fungi, but does not include any fungi intended by the insured for consumption.
No Further Action (NFA)
A common designation assigned to properties with known contamination, indicating that the regulators are requiring no additional remedial action to be undertaken by responsible parties, based on the information available at that time. May be revoked under certain qualifying circumstances.
No Known Loss Letter (NKLL)
Document signed and dated on the insured’s letterhead stating there is no knowledge of current or pending losses.
Non-Owned Disposal Sites (NODS)
Defined as any waste treatment, waste storage or waste disposal facilities, which are
utilized by or on the behalf of the insured for waste generated from a covered location.
An endorsement that will provide coverage for incidents that occurred before the inception of the policy. This is used when converting a claims made policy to and occurrence policy.
Natural Resource Damage (NRD)
Defined as physical injury to, destruction of, or the assessment of physical injury or destruction, including the resulting loss of value of, land, fish, wildlife, biota, air, water, groundwater, drinking water supplies, and other such resources belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by the United States (including the resources of the fishery conservation zone established by the Magnuson-Stevens Fishery Conservation and Management Act 16 U.S.C.1801 et seq.), any State, Local, Provincial, foreign government, or Native American tribe, or, if such resources are subject to a trust restriction on alienation, any member of a Native American tribe.
Operations and Maintenance Programs (O&M)
A program that specifically addresses procedures, ranging from renovation to light bulb changes and other activities, that might disturb material.**
An event that results in an insured loss.
Any substances in water, soil, or air that degrade the natural quality of the environment, offend the senses of sight, taste, or smell, or cause a health hazard.
Pollution Legal Liability (PLL
PLL covers pollution conditions emanating from the designated locations. Off-site third-party, BI/PD, cleanup, and defense costs are included in the limit. As a general rule, the markets will endorse the policy to add on-site coverage. Coverage may be available for a specific site or a portfolio of sites. The policy can also be amended to provide coverage for the transportation and disposal of waste, first- and third-party diminution of property value, and first-party business interruption. The policy form is available on a claims-made basis.**
An insurance policy written for a specific term covering the risks arising out of all the insured's ongoing activities (or insured services) during that term.**
The insurance policy that responds first to an insured loss, either on first dollar basis or after allowing for a deductible.**
A policy covering all parties responsible for a product where its failure might cause a pollution condition.
Any situation where the insured may need to make decisions based on his or her professional option. This may include making slight adjustments on the provided plans to get the job done properly, supervising subcontractors, or providing other recommendations which could potentially be questioned in the event of a claim.
Policy that the insured purchases under a valid and collectible project-specific insurance policy or owner-controlled insured policy for which an insured is provided insurance coverage. **
Resource Conservation and Recovery Act (RCRA)
RCRA is a federal law enacted in 1976 that established a regulatory system to track hazardous substances from their generation to their disposal. The law requires the use of safe and secure procedures in treating, transporting, storing, and disposing of hazardous substances. RCRA is designed to prevent the creation of new, uncontrolled hazardous waste sites.*
Any spilling, leaking, leaching, pouring, emitting, emptying, escaping, discharging, dumping, or disposing into the environment of a hazardous or toxic substance.
Retro Active Date
The date that defines the extent of coverage in time under claims-made liability policies.
Sudden and Accidental (S&A)
Coverage for pollution incident that has taken place within a specific time frame and is deemed accidental -- specific time frame is beginning and ending within 72 hours.
Self-Insured Retention (SIR)
Threshold(s) on an annual basis that must be met before coverage
will be applied.
Statement of Qualification (SOQ)
The statement of qualifications includes the insured’s experience, completed projects, and licenses held by the insured reflecting that they are qualified to provide a certain service.
Spill Prevention, Control, and Countermeasure (SPCC)
A plan to help prevent any discharge of oil into navigable waters or adjoining shorelines. The main goal of the SPCC regulation is prevention
as opposed to after-the-fact reactive measures commonly described in Oil Spill Contingency Plans.*
Third-Party Action Over
A type of action in which an injured employee, after collecting Workers Compensation benefits from the employer, sues a third party for contributing to the employee's injury. Then, because of some type of contractual relationship between the third party and the employer, the liability is passed back to the employer by prior agreement. Additionally, there are instances in which the third party can circumvent the exclusive remedy doctrine of Workers Compensation and enjoin the employer in the action. Depending on the nature and allegations of the action, coverage may be afforded under the contractual liability section of the employer's commercial liability policy or the employers liability section of the employer's Workers Compensation policy.**
Transportation Pollution Liability (TPL)
Covers the insured against pollution conditions arising from the transportation of materials, equipment, etc.
Underground Storage Tank (UST)
A tank that has the majority of its structure beneath the surface of the ground. USTs are designed to hold gasoline, other petroleum products, and hazardous materials.
Voluntary Cleanup Program (VCP)
An agreement between EPA Regional authorities and state environmental programs that promote the coordination and define general roles regarding the cleanup of sites.*
Wastewater Treatment Plant
A facility containing a series of tanks, screens, filters, and other processes by which pollutants are removed from water.
*Definition from www.epa.gov
**Definition from International Risk Management Institute, Inc. www.irmi.com
Please note: These definitions may or may not be the same as the defined terms found in an environmental insurance policy.