Chris Bunbury, eS

1
WELCOME
Chris Bunbury, eS Environmental Risk Managers,
Inc. Email jcbunbury_at_aol.com Phone (231)
256-2122 Fax [phone] PO Box 1127 Leland,
MI 49654 www.EnvironmentalRiskManagers.com
2
ENVIRONMENTAL RISK MANAGEMENT AND INSURANCE
STRATEGIES FOR MANUFACTURERS
3
EVERY MANUFACTURER IS IMPACTED BY ENVIRONMENTAL
EXPOSURES
4
What is a pollutant?

• A material, substance, product. introduced to an
  environment for other than its intended use /
  purpose.
• Fresh water
• Cheese

5
Environmental Liability Exposures
If a manufacturer waits until an environmental
problem occurs and any governmental body gets
involved, the cost to address the environmental
problem will increase on an average of 35 to 50
6
To be sustainable / transparent you start with
risk management

• Purchasing raw materials
• FOB point of shipment?
• FOB point of delivery?

7
Environmental Liability Exposures Impacting
Manufacturers
8
Potential Environmental Exposures Impacting
Manufacturers

• Air emissions
• Toxic Release Inventory (TRI) chemicals
• Industrial and hazardous waste
• Product cleaning and chemical treatment
• Asbestos and lead
• Loading, unloading, and transportation exposures

9
Potential Environmental Exposures Impacting
Manufacturers

• Vapor Intrusion
• Raw materials stored and utilized in operations
• Storm water runoff
• Natural resource damage
• Spills from underground or above ground storage
  tanks
• Old equipment storage (bone yards)...

10
Environmental Liability Insurance Coverage
Overview For Manufacturers
11
98 of US businesses are small business that
cant afford to self insure their environmental
exposures

12
3 Main Benefits of Environmental Liability
Insurance

• Defense costs
• Claim management
• Third party liability (property damage, bodily
  injury,
• and business interruption)?

13
Face value of an environmental insurance policy
costs the insured tenths of a cent on the dollar,
or the insured can wait until a loss occurs and
pay 100 cents on the dollar out of their own
pocket
14
Environmental Impairment Liability (EIL)

• Also referred to as Pollution Legal Liability
  (PLL)
• Site Specific Coverage for new and/or
  pre-existing
• unknown environmental conditions
• First party on site cleanup
• On site and off site third party bodily injury,
  property
• damage and business interruption
• First and/or third party auto pollution
  liability
• Off site disposal coverage
• GL with products pollution coverage
• Under ground storage tanks

15
Property Transfer Coverage

• Protects the buyer and/or seller should an
• environmental condition be found that was not
  caused by the new purchaser of the property
• Supports the value of the property
• Fills in gaps with environmental due diligence
• Allows you to negotiate a more favorable loan
  package

16
Risk Transfer / Risk Funding

• For larger insureds looking to take control of
  their destiny. Larger Brownfield projects
• Blended product involving transferring risk and
  self funding
• Insured develops their own insurance policy and
  its administered by a third party
• Have CPA review

17
Transportation Pollution Liability (TPL)?

• Not the MCS 90 endorsement
• Broadened auto pollution liability form CA 9948
• Covers during the loading / unloading and
  transportation of the cargo
• 800,000 tons per day of hazardous materials are
• shipped in the United States
• How do you purchase your raw materials FOB point
  of shipment / delivery
• Commingling of transported waste

18
Underground and Above Ground Storage Tanks (UST
or AST)?

• Protects for releases from underground tank
  systems
• Does not replace tanks or equipment
• Natural resource damages covered?

19
Who are you doing business with?
Vendors can create environmental liabilities for
you. Do they have the financial assurance to
protect you?
20
Contractor Pollution Liability (CPL)?

• Protects the insured while operating away from
• any premises they own, rent, lease or occupy,
  should they cause or exacerbate an environmental
  liability.
• Contractors conducting
• HAVC work
• Equipment, building or grounds maintenance
• Millwright work
• Construction...

21
Professional Liability (EO)?

• EO coverage for environmental
  engineers/consultants conducting
• Environmental site assessments
• Air monitoring
• Waste characterization....

22
A metal manufacturer had been removing oil and
grease from their products prior to painting
them. The metal goods were passed through a
vapor bath of trichloroethylene (TCE) a common
solvent. Over time the vapors settled around the
plant and at the time of an environmental site
assessment it was determined the groundwater
surrounding the plant contained significant
concentrations of TCE and other solvents. Cost
to remediate the site was 900,000
23
While moving a large metal coil, a forklift
operator hit a hydrofluoric acid aboveground
storage tank releasing dangerous fumes into the
neighboring community. Area residents and
businesses were evacuated and several people were
treated at the local hospital for fume
inhalation. Claims for bodily injury and business
interruption topped 94,000.
24
A manufacturer stored bag house dust containing
heavy metals in an uncovered dumpster behind
their facility. Whenever is rained, storm water
mixed with the dust forming a slurry, which ran
offsite. Testing of a nearby stream bank showed
high levels of lead, cadmium and mercury. The
contamination source was determined to be the
dumpster runoff. The manufacturer was
responsible for cleanup costs and natural
resource damages in excess of 250,000.
25
A manufacturer used a machine that punched
holes in sheet metal. A portion of the machine
was located beneath the floor. Over time
lubricating oils form the machines moving parts
were released into the surrounding soil. A
homeowner down gradient from the manufacturer
notice their well water smelled like petroleum.
Testing of the well water revealed it contained
alarmingly high concentrations of petroleum
hydrocarbons. The source of the problem was
determined to be the leaking equipment. The
homeowner was forced to hook up to a municipal
water supply. Cost for the hook-up along with
claims for bodily injury and remediation expenses
exceeded 500,000.
26
A manufacturer began expansion of their
production line. During excavation, oily soils
with a petroleum odor were discovered. Further
investigation uncovered an old undocumented
sludge drying pit which the previous owner used
back in the 1940s. The manufacturer had to
remove and remediate the soils at their own
expense. Cleanup costs exceeded 400,000.
27
A manufacturer stored a drum of caustic
chemicals next to a drum of highly reactive acid.
When a forklift disturbed the drums, their
contents were released, causing a violent
reaction. Fumes spread over neighboring
properties forcing businesses and local residents
to evacuated the area. Business interruption
claims form neighboring businesses exceeded
300,000.
28
A chemical manufacturer stored incorrectly
labeled drums or raw materials used for the
manufacture of dry cleaning products. One day
neighbors noticed a thick whitish-yellow vapor
cloud emanating from the facility. The fire
department was called and after reading the
labels on the drums they began to spray them with
water. This caused an explosion which released a
thick smoke cloud of sulfur dioxide. Forty
plaintiffs filed suits to recover damages from
injuries suffered from exposure to the sulfur
dioxide cloud. Settlement exceeded 3,000,000.

29
A manufacturer used concrete trenches to
transport plating line waste to the onsite waste
water treatment system. The high acidity of the
wastewater degraded the trenches that allowed the
wastewater to seep into surrounding soils.
Subsequently the soils and ground water were
contaminated with heavy metals and solvents used
in the plating process. Testing in a nearby
stream revealed that fish had high concentrations
of metals in their systems as a result of the
contamination. Due to this governmental agencies
prohibited fishing. A local environmental group
submitted a class action suit against the platter
for loss of enjoyment of the stream. The group
also sued for perceived bodily injury claims of
ingestion of the contaminated fish. Total cost
to settle the suit and remediate the site
exceeded 3,200,000.
30
Conclusion

• Environmental exposures impact every
  manufacturer
• Sustainability begins with Risk Management
• Most manufacturers cant afford to self insure
  their environmental liabilities
• Who are manufacturers doing business with that
  can cause them to experience an environmental loss

31
Thank you for your time.
To drive your environmental insurnace sales
contact Parker Bunbury _at_ parkerbunbury_at_gmail.com
Phone [phone] Chris Bunbury _at_
jcbunbury_at_aol.com Phone [phone] www.Enviro
nmentalRiskManagers.com