Pollution Liability
and the Liability
Protection
Agreement
Nicole Purves, Deputy Director of Claims
June 16, 2016
P. 1
The Liability Protection
Agreement
• Designed for local governments by local
governments
• A general liability policy tailored to member
needs
• LPA includes some pollution liability coverage
MUNICIPAL INSURANCE ASSOCIATION OF BRITISH COLUMBIA
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What Is Covered?
Bodily Injury and Property Damage claims are
covered when a member unintentionally and
unexpectedly releases, discharges or disperses a
pollutant IF the following reporting guidelines are
met:
• The release is detected within 240 hours AND
• The release is then reported to the MIABC within
120 hours of being detected
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What is Covered? cont.
Our coverage was expanded in 2012 with the
introduction of the Pollution Liability Endorsement.
Under the endorsement the reporting guidelines do
not apply in certain instances:
• The release of pollutants must occur on the
member’s premise
• Coverage is limited to $1 million
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Examples of Covered
Claims
• Chlorine leak at a pool causing injury to patrons.
• Escape of chlorine from a facility causing a localized
chlorine cloud and resulting in a claims for
respiratory issues by nearby residents.
• Bodily injury and property damages resulting from
E. coli contaminated water entering the distribution
system.
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The Pollution Liability Exclusion:
This coverage does not apply to:
a)
Pollution Liability
i) Claims in which it is alleged that an error, omission, act, or breach of duty of an Insured Party caused or
contributed to the actual, alleged or threatened release, escape, discharge, dispersal or presence of a
Pollutant or Pollutants.
ii) An Insured Party’s direct or indirect Regulatory Liability.
iii) Claims of another party for indemnity or contribution for that other party’s Regulatory Liability
iv) Arising out of the actual, alleged or threatened release, escape or discharge of pollutants:
a) at or from any site or location used by or for an Insured Party or others for the handling, storage,
disposal,
processing or treatment of solid waste;
b) which are at any time transported, handled, stored, treated, disposed of, or processed as solid
waste by or
for an Insured Party or any firm or organization for whom an Insured Party may be legally
responsible
b) Clause (a) i) shall not apply to:
i) Claims arising by reason of the release, escape, discharge or dispersal of a Pollutant or Pollutant
caused directly and solely by an Insured Party provided:
(a) such release, escape, discharge, or dispersal is detected by an Insured Party within 240 hours after the
commencement of the release, escape, discharge or dispersal, and is reported to the Association within
120 hours of being so-detected; and
(b) such release, escape, discharge or dispersal is unintended and unexpected
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The Pollution Liability Exclusion: (cont)
c) Clauses (a) i), and (a) iv) shall not apply to:
i)
That portion of any claim for damages where the damages have been caused directly and
solely by heat, smoke, or fumes from a Hostile Fire; explosion; collision; falling object;
lightning; windstorm; acts of vandalism; sabotage; or malicious mischief neither expected
nor intended from the standpoint of an Insured Party
d) Fines, penalties, punitive or exemplary damages arising directly or indirectly out of the
discharge, dispersal, release or escape of any pollutants.
e) For the purpose of this exclusion, the following definitions shall apply:
i) Pollutant or Pollutants: any solid, liquid, gaseous, thermal or electromagnetic irritant or
contaminant, either naturally occurring or otherwise, and including but not limited to smoke,
vapour, soot, fumes, acids, alkalis, chemicals, waste, ureaformaldehyde, and electromagnetic
currents. ‘Waste’ includes materials to be recycled, reconditioned or reclaimed. The term
‘Pollutant’ or ‘Pollutants’ includes a potential or alleged Pollutant or Pollutants.
ii) Regulatory Liability: any liability for losses, cost, or expense arising directly or indirectly out of
any statutory requirement or governmental order,
action, direction, or request to test for, investigate, monitor, cleanup, remove, relocate, contain,
treat, detoxify, decontaminate, or neutralize a Pollutant or Pollutants.
iii) Hostile Fire: a fire which becomes uncontrollable or breaks out from
where it was intended to be.
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Some key elements of the
pollution liability exclusion:
• Claims arising from Regulatory Liability are not covered
• claims for escape of landfill leachate onto neighbouring
properties is not covered
• Failure to report pollution incidents in a timely fashion will
restrict coverage even further
MUNICIPAL INSURANCE ASSOCIATION OF BRITISH COLUMBIA
P . 88
Examples of Claims that
are NOT covered
• costs to stop contamination from migrating to adjacent
properties and also cleanup the contamination
• Migration of leachate from a waste site to neighbouring
properties
• Costs pursued by current land owners to remediate
contaminated lands formerly owned by local governments
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Tips to Consider
• Know your potential pollution risks
• Assess your coverage needs accordingly
• Ensure that all relevant staff are aware of the
reporting guidelines
MUNICIPAL INSURANCE ASSOCIATION OF BRITISH COLUMBIA
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P .10
Environmental Impairment
Liability (EIL) Insurance
Some members may have coverage needs more
extensive than what is available through our LPA.
Environmental Impairment Liability Insurance
provides coverage that is designed specifically to
cover those who routinely engage in activities
connected to toxic or contaminating products or
by-products.
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P .11
EIL Coverage
• EIL policies will generally have broader coverage for
a wide variety of pollution events
• They will often cover third party property damage
and bodily injury claims
• They will also often cover off-premises clean up
costs
• They may also include cover for costs imposed by
regulators
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P .12
Additional Coverage
If you are interested in finding out about broader
and more extensive pollution coverage options,
environmental impairment liability insurance is
available at an additional cost. Members who are
interested should contact Marina Sen in the
MIABC’s Insurance Department or their insurance
broker.
Marina Sen, [email protected] or 604.449.6364
MUNICIPAL INSURANCE ASSOCIATION OF BRITISH COLUMBIA
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P .13
Questions or Concerns?
Nicole Purves
Deputy Director of Claims
604.449.6360
[email protected]
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P .14