insurance: Protecting Landfills in a Changing Regulatory Climate

Joseph Catanese

No one feels the sting of changing regulations like landfill owners, and no one area in a site's risk management plan can be affected more significantly than its insurance program. Is the facility adequately covered today? Will it be tomorrow? Are any wastes or pollution conditions excluded from the policy?

However, arming yourself with the proper insurance coverage can be a challenge further complicated by the many choices being offered in today's insurance market, especially when considering what specific environmental exposures are insured and under what scenarios they are covered.

For example, a growing number of insurance carriers offer some form of pollution coverage under a business' standard Commercial General Liability policy (CGL). However, facility owners should be skeptical about relying on their CGLs for pollution coverage.

Because insurance companies suffered severe financial losses from early environmental cleanup and asbestos claims in the 1970s, many carriers stopped offering pollution coverage on standard liability policies.

They introduced the "pollution exclusion," then the "absolute pollution exclusion" to all CGL policies to prevent paying out on pollution claims. As a result, pollution protection normally is excluded from CGLs.

Today, environmental risks are complex and continue to change. For example, the U.S. Environmental Protection Agency (EPA) is considering reclassifying petroleum waste as hazardous. Under the reclassification, a landfill that currently accepts petroleum waste or has accepted it in the past, will become a hazardous waste disposal facility. In turn, such facility owners may need additional insurance to meet new financial responsibility requirements under the Resource Conservation and Recovery Act (RCRA). [See World Wastes October, page 44]

With reclassification a possibility, it is important for landfill owners to be aware of insurance coverages and of the environmental insurance policies covering new exposures. For example, Environmental Impairment Liability (EIL) coverage first was offered between late 1979 and early 1980.

This policy, also known as Pollution Legal Liability (PLL) coverage, was developed to fill the coverage gap under the CGL policy created by the pollution exclusion and to meet RCRA's financial responsibility requirements for hazardous waste treatment, storage and disposal facilities (TSDFs).

These requirements, which previously only applied to hazardous waste TSDFs, ensure that facilities can afford to remediate sudden and non-sudden pollution that could emanate from the facility.

While environmental insurance policies were developed to help TSDFs meet RCRA's requirements, in the past five years, the coverages have changed. Now, a broad range of insurance policies and programs offer first- and third-party coverages against damages caused by chemicals, hazardous materials and related environmental contaminants.

There also are specialized policies that provide coverage for Superfund liability, as well as for real estate and property transfer environmental liability.

For example, the commonly held PLL policy covers third-party legal liability for pollution coming from a landfill and includes defense costs and remediation expenses. However, the Pollution and Remediation Legal Liability (PARLL) policy is available to round out a landfill's insurance program, as it covers loss, remediation expense and legal defense expense for sudden and gradual pollution conditions.

Today, environmental insurance coverage is as common as general liability and automobile insurance. The availability and flexibility of coverages, coupled with affordable premiums, are prompting more businesses to seek environmental insurance coverages before they are affected by regulatory changes.

Certification The Drivetrain Service Division of Dana Corp., Toledo, Ohio, has received ISO-9001 certification.

Contracts EET Corp., Knoxville, Tenn., has received a $19 million subcontract from California-based Bechtel Jacobs Co. LLC to perform computerized tracking of waste at U.S. Department of Energy sites in Oak Ridge, Tenn., and Paducah, Ky.

Pall Rochem, Port Washington, N.Y., has received a $2.5 million contract to provide the leachate treatment system for Lane County's Short Mountain Landfill in Eugene, Ore. It also has been awarded a $1 million contract for Hall County's Chandler Road Landfill in Gainesville, Ga.

Grants The National Recycling Coalition, Alexandria, Va., has received a $50,000 grant from the Citicorp Foundation and a $35,000 grant from the Z. Smith Reynolds Foundation to support its Sustainable Jobs Fund.

The U.S. Environmental Protection Agency's Solid Waste program is soliciting proposals for its Climate Change Action Plan (CCAP), Pay-As-You Throw (PAYT) and Jobs Through Recycling (JTR) grant programs. Applicants should discuss project concepts with the appropriate contacts. For JTR, contact: John Leigh at (703) 308-7896. Information also is available on the website: www.epa. gov/jtr For CCAP, contact Henry Ferland at (703) 308-7269. For PAYT, refer to the website: www.epa.gov/payt

Internet Vermeer Manufacturing Co.: www.vermeer.com

Merger Hi-Rise Recycling Systems Inc., Miami, has completed its merger with Bes-Pac Inc., Easley, S.C.

New Facilities Bering Truck Corp., Front Royal, Va., has broken ground on its Front Royal Assembly and Manufacturing facility, which is scheduled to be completed by fourth quarter 1999.

Recyclights Inc., Minneapolis, has opened a fluorescent lamp recycling transfer station in Atlanta.

RRT Design & Construction, Melville, N.Y., has repaired Cobb County, Ga.'s municipal solid waste composting facility, which had been shut down for nearly two years due to fire damage.

New Name Ross-Martin, Tulsa, Okla., has changed its name to Corporate Express Recruitment Advertising Services.