Contaminated Properties : Insurance Claims

Insureds sometimes compromise their coverage rights by not knowing the ins and outs of coverage…

When it comes to environmental claims, insurers don’t often acknowledge coverage voluntarily.  Sometimes a letter (the “right kind” of letter) is all it takes to secure defense (i.e., the services of a lawyer) and a “reservation of rights” letter that effectively acknowledges a duty to indemnify the insured.  Sometimes it takes a coverage suit, which will generally be litigated in federal court.  Insureds sometimes compromise their coverage rights by not knowing the ins and outs of coverage, for example the distinction between releases to soil (not covered) and releases to groundwater (covered), and the implications of whether you are removing contaminated soil for its own sake (not covered) or because contamination within the soil column may be a continuing source of (or threat to) groundwater (covered).  The age of a release of hazardous substances (determined by forensic analysis, or by discovering the source of the release) can make the difference between coverage (under pre-1986 policies) and no coverage.  So called “claims made” policies may trip up insureds who are not aware of reporting requirements in their policies.  If you find yourself owning contaminated property it’s always a good idea to have your insurance coverage reviewed by an experienced attorney.  Environmental Compliance can help with that.