Coverage for the past, present and future
A national real estate and development firm had big plans to turn a former landfill and low-income public housing project in Florida into a new mixed-use, multi-family property, which would meet the needs of the community and local government. Neither the broker nor developer were veteran brownfield redevelopment players, and each sought guidance on environmental insurance matters.
Zurich was asked to help determine the appropriate environmental insurance coverage, especially since it involved the sensitive issue of turning a prior unregulated landfill into residential use. Not only did the developer need to be insured for certain potential risks, but contracts also required that the city as the prior owner, the lender, and the contractors and subcontractors working on the remediation and removal of the contaminated soil be insured as well. Because of prior experience as an environmental consultant, Zurich’s underwriter was able to effectively communicate with the stakeholders, making them aware of certain technical issues in regards to the soil contamination, which included polycyclic aromatic hydrocarbons, lead, arsenic and pesticides, and how they could be managed.
Both the broker and developer were impressed with the flexible nature of Zurich’s Z Choice™ Pollution Liability insurance policy that offered coverages for:
- Onsite and offsite cleanup of both known and unknown pre-existing and new pollution events
- Third-party bodily injury and property damage arising from both known and unknown pre-existing and new pollution events
- Natural resource damages for pre-existing and new pollution events
- Non-owned disposal site coverage
- Mold insurance coverage
Flexibility at the holidays and beyond
The middle of December and the busy holiday season may not seem like an ideal time to be reviewing environmental exposures, especially for a large real estate investment trust (REIT) with dozens of regional malls and outlet centers. The REIT found itself needing to review exposures for all its 383 properties across North America, Europe and Asia, and determine the right solution before the end of the year—just a few weeks away.
Zurich’s environmental underwriting and risk engineering team spent two full days at the company’s U.S. headquarters reviewing environmental documents and reports for all properties. Zurich was able to save the REIT substantial time and effort during the end-of-year time crunch by conducting an on-site underwriting review. The Zurich team familiarized themselves with the REIT's exposures, and identified a comprehensive list of environmental insurance coverages needed. These included: costs to clean up mold, asbestos and other pollution resulting from tenant occupancies such as retail drycleaning and automotive repair operations; cleanup costs resulting from migration of pollution from adjacent properties; and potential costs associated with compensating third parties for property damage and bodily injury. In the end, the REIT purchased a Z Choice™ Pollution Liability Insurance Policy from Zurich to address their environmental needs. The flexible design of Z Choice could cover a large number of locations (or a single site) as well as a wide variety of pollution exposures.
Quick Turnaround For A Better Financing Solution
An international hospitality company had thousands of properties with backup generators connected to storage tanks. The company was meeting its financial responsibility requirements through a self-insurance program. Due to restructuring and changes in internal finances, the company could no longer meet its financial responsibility requirements through this approach. Zurich’s underwriters were asked to meet with the company, and turn around a solution in little more than a day. The company was impressed not only with the speed, but the level of knowledge and insight Zurich’s environmental team delivered virtually overnight.
Fast Response To The Snowballing Effects of A Collision
It’s hard to imagine anything worse than a snowplow hitting your fuel pump at 4:30 a.m., but that was just the beginning of a series of events that began to snowball quickly. Once the snowplow toppled the pump and severed the fuel line connections at the shear valves (designed to prevent leaking fuel), an employee was able to turn off the gas to the fuel dispenser and stop the leak within minutes of the collision. Only about 10 gallons were released at this time.
The gas station employee immediately called the tank technician contractor, who advised that it was safe to begin dispensing fuel again. Business resumed as normal for an hour to meeting the demands of the morning rush. When another technician arrived to deliver parts to repair the damaged shear valves, it was quickly determined that fuel was still leaking, and in fact, more than 4,000 gallons were missing from the system. Unfortunately, this leaking fuel migrated to a storm and sewer outfall near a river.
Within 24 hours of the release, Zurich’s environmental claims professionals provided technical knowledge to support the station owner during the emergency response activities at the site. Our team was also there with guidance throughout the on-going remediation of this site.
A fresh start with one-stop coverage
An asbestos abatement contractor served major power companies throughout the East Coast. Potential environmental exposures could be quite large, as many of these power companies had steam pipes wrapped in asbestos running for miles underground. Second to the environmental exposures, the contractor faced significant workers’ comp issues due to the intensive physical work and environmental hazards for employees working on the pipelines. Since its environmental insurance carrier did not provide workers’ comp, the company had no choice but to go with two carriers for that coverage.
Managing claims with multiple insurance carriers was becoming a hassle both for the broker and company. Having had a positive experience with the one-stop coverage of Zurich for another customer, the broker recommended that the contractor consider consolidating all of their coverage— environmental, excess liability, auto and workers’ comp—with Zurich as well. During a face-to-face meeting with the broker and customer, Zurich also offered the services of its claims liaison specialist. This would allow the broker to pick up the phone and have instant access to special claims handling for the contractor. Because of the one-stop convenience and outstanding claims services, the contractor made the decision to start a new and more efficient relationship with Zurich.
Experience shows in the details
A large environmental contractor in New England operates a wide range of services to dozens of municipalities and environmental consulting firms across the region. Its services include: water and wastewater management, construction and operation of water and wastewater treatment systems, preventative maintenance programs, system support and inspection services for dozens of municipalities and environmental consulting firms across the region. An error in this contractor’s work for a municipality or consultant could affect the water supply for millions of people or potentially contaminate regional surface waters.
The company’s revenue base had increased by 25% in recent years, and a new broker was brought on board to take a more comprehensive look at its environmental risks. When Zurich’s underwriter was called in to discuss potential risks, we were providing the contractor with a seasoned professional—someone who had more than 25 years of underwriting, civil engineering, risk management, and environmental consulting knowledge. New insights offered by Zurich led to an enhanced Contractor’s Pollution Liability coverage over the previous policy.
A refreshing approach to service
With nine regional offices spread throughout the United States, a specialty environmental contractor needed a high degree of hands-on attention when it came to managing the potential risks of its asbestos abatement and mold remediation services. Because of the large size and complexity of its potential exposures and broad geographical reach, Zurich determined this contractor required a single primary and dedicated contact to coordinate the program. This customer solutions director would oversee everything on the account from risk engineering to claims, providing the company with a consistency and ease of managing its insurance program.
The company’s CEO found Zurich’s dedicated approach to its coverage needs “refreshing.” Zurich’s capabilities of writing all lines of coverage also made a difference. A comprehensive program was crafted that included workers’ compensation, auto, excess, general liability, surety, railroad protective liability and pollution liability. Zurich’s specialized Contractor’s Pollution Liability provided coverage for third party bodily injury, property damage including clean-up, and mold coverage.
Lending strength and flexibility to complex deals
After two years of a stalled capital market lending environment due to the credit crisis, one of the country’s largest financial institutions was ready to move on a very large commercial real estate backed loan. The transaction included more than three dozen properties and included hundreds of miles of railroad right-of-ways. Halfway through the deal, the lender discovered that the borrower had not obtained environmental insurance—a requirement of the lender and rating agencies for this loan. In addition, limited environmental assessment reports existed, especially on the railroad right of way property which dated back to the early 1900s.
The lender’s broker turned to Zurich in North America because of its experience in handling complex capital market deals, capacity to provide high limits of liability, and ability to move quickly. Since the date of the transaction was already set, the environmental coverage had to be secured in time for the deadline, or the lender risked losing a significant amount of money. In a matter of days, Zurich mobilized its team of environmental underwriters, risk management specialists, and lawyers to review thousands of pages of financial reports, property documents, and policy language. The team consulted with the broker twice a day regarding the structure of the loan, policy requirements, and other details. Within two weeks, the lender received the environmental coverage it needed on one of the first commercial mortgage backed securitized loans without government backing since the credit crisis began, positioning the lender for more business—and success—in the future.
Creating A Portfolio Of Efficiency
A large commercial bank was looking for an efficient way to handle their potential environmental liability exposures when making loans backed by small commercial real estate. Zurich was asked to develop a lender portfolio program tailored to the bank's lending group. Once Zurich’s program was put in place, the lender discovered that more loans could now be made because loan officers no longer had the time-consuming task of reviewing environmental site assessments. Because of the success of this portfolio program, Zurich was asked by the lender to develop portfolio programs in two other lending units.
Moving At The Speed Of A Deal
A lender was interested in providing a very large loan ($60 million) to a commercial borrower. The loan had 100 fast food franchise restaurants as collateral, and there was not enough time to obtain and review environment site assessments on all of the properties within the two week window available to complete the deal. The lender was willing to accept an environmental escrow from the borrower, but the cost of the escrow to the borrower was 5 times higher than the cost of insurance. As an alternative to the escrow, the lender accepted environmental insurance for this loan. The borrower paid the cost of an environmental insurance policy for the lender in place of providing funds in an escrow account for the 10 year loan term.
Zurich reviewed the existing environmental information, obtained current environmental questionnaires and ran database reports on each of the sites. In short, Zurich was able to underwrite the deal and bind it within the two week deadline.
Building confidence through technical knowledge
A leading industrial waste management company had recently been purchased from the original family owners by four of the principals. The company’s five facilities throughout the Midwest specialized in the treatment and recycling of metal-bearing liquids and solids—the waste generated by metal operations of all types. Because of their new ownership and financial responsibilities, the principals were looking for an insurance carrier that could offer a comprehensive solution based on a deep understanding of their business.
Zurich’s underwriter traveled with the company’s broker to the main facility to spend time with the new owners. It was quickly apparent that the underwriter’s background in environmental engineering and consulting gave the owners the confidence in knowing that if any technical issue arose, they’d have someone on board who understood the business as well as the associated government regulations. The company also appreciated the Z Choice product, which offered a flexible, menu approach to tailoring their site pollution policy to fit their needs, and make adjustments where needed without modifying the policy form.
In addition to the environmental insurance coverage, Zurich designed a comprehensive package of general liability, auto, workers’ compensation, property and umbrella—giving the new owners additional confidence and convenience in having a “one-stop, one-contact” solution for all their insurance needs.
Comprehensive service for complex operations and site exposures
Chemical manufacturing by its very nature comes with a high number of risk exposures. But when a company’s main operations are situated on a previously contaminated site, it adds an extra level of complexity since both the existing as well as new conditions present liability exposures for which insurance coverage would be needed.
The company was looking for an insurance partner who truly understood the risk issues presented not only by its operations but from the historic site operations. Zurich presented a full team of environmental and underwriting specialists to the manufacturer—experienced professionals who understood the chemical operations and existing site conditions and could craft the unique coverage requirements. In subsequent follow-up meetings with Zurich's risk engineers and claims specialists, the manufacturer experienced the detailed attention Zurich would pay to every aspect of its insurance needs.
Zurich’s knowledge of complex manufacturing issues, comprehensive risk management support, and outstanding claims service gave the chemical manufacturer the comfort of having a partnership that would be invaluable for years to come.
Selecting the right insurance ingredients
Producing and distributing more than 400 varieties of dressing and sauces, this large food manufacturer provides its products to retail food companies and foodservice operators throughout most of the US, and enjoys sales of $160 million annually. It operates three main production facilities in the Northeast, Southeast and West, and also offers custom production, labeling, and packaging services for other food manufacturers.
One of their main environmental exposures is the potential for business interruption that could occur because of a pollution event with their operations. For example, production could be disrupted because of a significant release of canola or vegetable oil that is stored in 20,000 gallon above ground storage tanks. The company found Z Choice offered just the type of insurance ingredients they needed, as it offered a great deal of flexibility to customize coverage to fit their specialized needs---- from business interruption to non-owned location coverage and first and third party transportation.
Collaboration for enhanced customization
One of the world’s leading fertilizer and special chemicals companies had made more than $100 million worth of capital improvements to enhance their risk profile in recent years. The company felt that the benefits of these improvements weren’t reflected in its existing environmental insurance coverage. So the company invited a new broker to approach Zurich and several other carriers for a fresh evaluation and to provide an alternative coverage approach.
As part of Zurich’s evaluation, our underwriting and risk engineering representatives and a risk engineer from Zurich Services Corporation traveled with the broker for a hands-on look at their production facilities abroad. We also collaborated with the company’s outside legal counsel and insurance consultant to work through the multitude of hazards unique to their fertilizer and chemical production sites. In the end, the company chose to go with Zurich because of our ability to customize coverage through our Z Choice™ product. This approach enabled the company to modify coverage as needed for its various sites, resulting in a more effective and efficient insurance program.
Finding the right chemistry
A chemical manufacturer and blender, supplying some of the largest players in oil and gas industry was seeking a new insurance provider. The producer and policyholder were seeking a customer centric insurance carrier that could deliver the perfect mix of coverage flexibility, risk engineering personnel with in-depth industry knowledge and responsive claims service. The company's business was heavily dependent on its fleet of hundreds of specialized vehicles and its ability to transport specialty chemicals and other blended products to its customers on time and safely. Because of the ever present potential for accidents and spills that could seriously disrupt its business and reputation, the company was also looking for specialized risk engineering insights along with quick and effective claims and spill handling capabilities.
Of critical importance to the company was its desire to operate its fleet safely and the company's requirements to comply with Department of Transportation (DOT) regulations. As part of their presentation, Zurich risk engineers offered to perform mock audits to help the company identify whether it had the proper controls in place as required by the DOT. Zurich also suggested that the company could benefit from its Spill Reporting Online System, a 24-hour service that facilitates a timely response by dispatching clean-up contractors, coordinating regulatory reporting and efficiently managing claims. And Zurich's Z-Link®, an environmental policy product allowed the company to combine general liability, environmental liability and clean up costs in one policy. Flexibility, knowledge, service-Zurich offered the perfect coverage chemistry to help meet this company's needs.