Author: pfadmin

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Did you know that historical commercial general liability (CGL) insurance policies are valuable assets that can be worth millions of dollars in the form of paying for legal fees, settlements, and damages? Historical insurance assets can protect the policyholder from lawsuits and administrative orders, and in many cases, can be worth cash.

“When old insurance policies are brought to the light of day, they put small business owners on the same playing field as governments and companies with deep resources.”

– Brent Huber, Ice Miller, LLP

The retrieval or reconstruction of a lost or misplaced CGL insurance policy can protect institutions from serious financial loss. A single insurance archaeology project can provide millions of dollars in defense costs and indemnity to the institutions faced with response costs for injuries and damages occurring under previous management. By using a company’s historical CGL insurance policies as a funding source to pay for the expensive cost of long-tail liabilities, important projects like asbestos abatement and environmental remediation can successfully move forward.

WHAT ARE COMMERCIAL GENERAL LIABILITY INSURANCE POLICIES? 

CGL insurance policies are purchased by business owners to cover them against their business’ liability exposures. This is very important in determining whether an individual or business’ old insurance policies can be used to pay for environmental investigations and remediation.

This makes CGL policies very important protection for corporate policyholders because they broadly provide defense and indemnity coverage against claims for bodily injury and property damage. Coverage includes products, completed operations, premises and operations, elevators, and independent contractors, to name a few.

HOW DO COMMERICAL GENERAL LIABILITY POLICIES PROVIDE LONG-TAIL CLAIMS COVERAGE?

Historical CGL insurance policies can be leveraged in legal defense and in cost-sharing of defense and settlements. The retroactive nature of long-tail environmental claims and latent injury claims, like asbestos exposure, means that old policies can be used to resolve complex claims involving events that occurred decades ago. These liabilities may be covered under old insurance policies which tend to be less restrictive and provide broader coverage. Even policies of bankrupt and defunct companies are commonly used to defend current claims. The same is true for the old policies of deceased individuals.

The resurrection of policies provides proof of coverage and equitable allocations which benefits both policyholders and insurance carriers. Insurance archeologists skillfully search and retrieve historical information that determines the coverage for claims and defense fees. The rebuilding of historical insurance coverage can limit the liability of individual clients and their carriers, and initiate coverage from additional policies, thereby creating a larger reservoir of monies for equitable allocation.

USING YOUR POLICIES FOR DEFENSE AND INDEMNIFICATION

After finding the old CGL policies, it is then critical that you know how to use these policies to your benefit. Insurance law is different from state to state and not every state has good law for the policyholder. Insurance policies contain different language, terms, and conditions which can vary by carrier and by policy period.

In pulling this concept together:

• A defense includes paying for lawyers dealing with latent injury cases including asbestos exposure, bodily injury and abuse claims. A defense would also include quantifying an individual or business’s exposure and liability.
• Indemnification is the process where the insurer makes the insured ‘whole’ again by paying for damages or losses already sustained and expenses already incurred.

WHO CAN BENEFIT FROM HISTORICAL COMMERCIAL GENERAL LIABILITY POLICIES?

Historical insurance policies can be beneficial in providing coverage for a number of different situations. For example:

• Plumbing and building supply companies defending product liability claims from exposure to products sold containing asbestos.
• Municipalities involved in litigation.
• Manufacturers of pumps defending product liability claims from exposure to asbestos gaskets.
• Churches and schools defending personal injury claims.
• Business property owners defending property damage claims by state environmental authorities.
• Insurance companies defending policyholders against environmental property damage claims and wishing to document insurance coverage of other potentially responsible parties.

WHAT DO HISTORICAL COMMERICAL GENERAL LIABILITY POLICIES COVER?

Once triggered, historical CGL policies may be used to for legal fees, defense against legal claims, interfacing with agencies, policy buyback, potentially responsible party (PRP) search, recouping costs, build legal cases, interim remedial measures, remediation/cleanup, site investigation and prior costs be may be retroactively recovered.

There could be millions of dollars in unclaimed assets available to parties looking to defend environmental claims and personal injury claims. PolicyFind works diligently every day to find yesterday’s policies for today’s claims.

HOW DO YOU FIND HISTORICAL CGL POLICIES?

Contact an insurance archeology firm with a multiline approach to developing leads to historical insurance assets and a large specimen policy library. An insurance archeology firm will locate your old policies to help you find the funds to defend against contamination, latent injury, asbestos, and toxic tort.

Call PolicyFind’s insurance archeology experts today at 866-888-7911 or fill out our form.

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The Madam Walker Legacy Center owns and operates out of the historical Walker Building, built in 1927 for Madam C.J. Walker’s haircare products. Last year, the Legacy Center embarked on an important neighborhood enhancement initiative of the Madam Walker Theater and the famed Indiana Avenue. Indiana Avenue has a long tradition as a place where African American owned businesses and music venues contributed to a thriving culture in the heart of the Midwest.

Research was conducted on the history of the neighborhood to determine what businesses were in operation, when they operated and where they were located. Studies indicated that several former dry cleaning operations were located at various times along the Avenue. Old dry cleaners get attention because they used cleaning solvents that would be discharged into sewers and end up causing soil and groundwater contamination that can often times cost in excess of a million dollars to clean up.   

As environmental investigations progressed, dry cleaning solvents were indeed discovered near some of these old dry cleaners and the Indiana Department of Environmental Management got involved to oversee the environmental work.

PolicyFind conducted insurance archeology research which included dozens of archives and pouring through hundreds of boxes of documents and thousands of documents pertaining to the company’s historical business operations. Of special note to archeologists were 16 boxes in the Indiana Historical Society’s collection associated with Mr. Freeman Ransom, who served as the company’s lawyer from 1910 until his death in 1947. According to Indiana Historical Society’s Biographical Sketch description, “Mr. F.B. Ransom met Madam C.J. Walker and became lawyer and business manager of the Madam C.J. Walker Manufacturing Company. Aside from managing the day-to-day operations of the company, he also handled Madam Walker’s personal legal matters.”

After reviewing a mass of ledgers, accounting records and legal documents within the Madam Walker Manufacturing historical files, PolicyFind archeologists located dozens of documents they believed could provide leads to historical insurance assets. The earliest record researchers located dated back to 1914.

PolicyFind next focused its attention of tackling old records stored inside of the Walker Building. Legacy Center officers directed PolicyFind investigators to several rooms filled with bankers’ boxes and old filing cabinets. 

What started as a routine insurance archeology effort ended up being one of the most comprehensive investigations in PolicyFind’s history. The level of documentation associated with Madame Walker as a person and the company history was unparalleled. Once insurance-related information spanning 1914 to the mid-1980s was gleaned, PolicyFind adjusted its sights to the esteemed Walker building itself. Through exhaustive research, PolicyFind found in excess of $100,000,000 in insurance coverage. 

This extensive effort, initiated by the Madam Walker Legacy Center, yielded one of the largest troves of insurance recovered in PolicyFind’s history and we were honored to bring these old insurance policies to light where they were used to engage insurance companies to pay for all of the cleanup costs from the long-gone businesses along the famed Indiana Avenue.

To find your business’ historical insurance policies, contact us. 

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By David A. O’Neill, JD

The California Supreme Court selected vertical exhaustion of policy limits as the rule in determining the sequence by which a policyholder may access excess general liability insurance coverage in its April 6, 2020 decision in Montrose Chemical Corporation of California v. Superior Court of Los Angeles County. In doing so, it rejected horizontal exhaustion as the rule in multi-tiered excess policy allocation cases.

MONTROSE CASE BACKGROUND

The Montrose Chemical Corporation (Montrose) saga began in 1990. The company filed a lawsuit to resolve various coverage disputes relating to claims it had tendered to its general liability insurers concerning continuous environmental property damage at its Los Angeles plant. Over the years, Montrose prevailed, and these carriers provided coverage under the primary insurance policies they issued in policy periods spanning 1947 to 1982.

A new chapter in the story, however, was opened in 2015 when Montrose filed its fifth amended complaint, seeking a declaration that its excess general liability insurers indemnify it for pollution clean-up costs under a theory of vertical exhaustion or elective stacking. It was now Montrose’s assertion that coverage under each excess policy was triggered as soon as the limits of an excess policy below it and within the same policy period had been exhausted.

In response, Montrose’s excess insurers argued collectively that Montrose’s upper tier excess policies would only be triggered when alllower level excess insurance policies covering the relevant years had been exhausted. The trial court denied Montrose’s motion for declaratory judgment and granted the insurers’ motion, ruling that the excess policies required horizontal exhaustion.

Montrose’s petition to the Appellate Court was denied. However, in 2017, unexpected aid from another Appellate Court arrived in the form of a published opinion in a case styled State of California v. Continental Insurance Co., 15 Cal. App. 5^th 1017. The court in that case determined that vertical exhaustion, not horizontal exhaustion was the appropriate rule given the same policy language and California legal precedents.

MONTROSE V. SUPERIOR COURT OF LOS ANGELES COUNTY CASE                                

The California Supreme Court granted review in this case to determine “whether vertical exhaustion or horizontal exhaustion is required when continuous injury occurs over the course of multiple policy periods for which an insured purchased multiple layers of excess insurance”. Reading the relevant policy language “in light of background principles of insurance law and considering the parties reasonable expectations”, the Supreme Court concluded that “a rule of vertical exhaustion is appropriate”. Under that rule, the insured has access to any excess policy once it has exhausted other directly underlying excess policies with lower attachment points. Additionally, it ruled that an insurer called on to provide indemnification may, however, seek reimbursement from other insurers that would have been liable to provide coverage under any excess policies issued for any period in which the injury occurred.

CASE INSIGHTS

An important consideration in the Supreme Court’s decision was the meaning of the other insurance clauses in the excess policies central to both the Montrose and Continental Insurance Co. appellate cases. Because nothing in these other insurance clauses “clearly or explicitly” stated that all lower-tier excess policies purchased at different policy periods must first all be exhausted, the Supreme Court was unwilling to give them such an interpretation. The Court found that the policies “are most naturally read to mean” that Montrose “may access its excess insurance whenever it has exhausted the other directly underlying excess insurance policies that were purchased for the same policy period.”

The California Supreme Court’s decision gives policyholders significant flexibility in pursing insurance recoveries in long-term injury cases such as environmental, cleanup, construction defect and toxic tort.

If you are dealing with environmental liability or latent injury, contact us for a confidential consultation.

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PolicyFind is the leading insurance archeology firm in the United States, and has an unparalleled success rate at finding evidence of historical CGL policies. In over 23 years, PolicyFind has uncovered more than $5 billion in usable insurance assets for attorneys, business owners, municipalities, real estate developers, and regulatory agencies. 

Here are some answers to the most frequently asked questions we’ve heard regarding the Confidential Insurance Archeology^® process.

 

Q. What is Insurance Archeology, and why is it beneficial for dry cleaners and other property and small business owners?

A. Insurance archeology is a term used to describe the process of locating and finding historical insurance policies that covered individuals and businesses. Historical insurance can be a huge benefit to dry cleaners as old policies can be used to pay for costs associated with soil and groundwater contamination investigations, legal representation and even the cleanup of contaminated sites.

Q. When should dry cleaners and other property and small business owners consider investigating their historical insurance coverage?

A. Right away. Finding historical insurance policies can be like finding hidden treasures or lost money. Business and property owners, even former business owners and operators, should make it a high priority to search, locate and securely store all of their old insurance policies and any evidence that may support that they had historical insurance.

Many dry cleaners wait until it is time to sell a business to figure out what they are going to do about contamination. At that point, there may be questions about the value of the property because of contamination. In order to have the value of the business at its peak, a dry cleaner should look for insurance coverage now as a way to reduce personal liability and maintain the value of their business.

Q. How can dry cleaners and other property and small business owners begin reconstructing the historical insurance coverage of their businesses?

A. The first step to reconstructing your insurance coverage is by reviewing your old business files and personal files. It isn’t uncommon when we talk with dry cleaners to learn that they have thrown away their old records. Many people only keep records for seven years, as this is the customary time that the IRS tells us we need to keep records for audit purposes. In these cases, we need to dig deeper. We need to focus on looking for companies and individuals that may have required proof that you had coverage, for example landlords, legal counsel and mortgage companies. Another approach is to call the expert insurance archeologists at PolicyFind. 

Q. Who is responsible for covering the cost of investigations and cleanups?

A. In many cases, PolicyFind can assist dry cleaners, as policyholders, with obtaining a defense from their old insurance policies. The site investigations of a dry cleaning business can be considered defense against claims because the investigations quantify liability and exposure for the insured. PolicyFind can also build a case for the dry cleaner to obtain a site cleanup by using the insurance company’s defense obligation.

Q. What kind of coverage do owners want to find in old policies?

A. Business or property owners should look for all insurance policies they can remember purchasing. The best policies would generally be the Commercial General Liability (CGL) policies written before 1985. Other valuable policies would include umbrella policies and excess liability coverage. Oftentimes, finding workers’ compensation policies, auto policies or other specialty policies can lead you to finding other coverage, because past brokers often provided dry cleaners with bundled policy packages.

Q. How can owners and operators tender claims to insurance companies so that old policies kick in?

A. Oftentimes finding just one year of coverage can be the catalyst to finding more coverage. This is because one year of coverage may be enough to obtain a defense and this defense could include finding other responsible parties, including past owners and operators of the dry cleaning business, and their insurers, as well as other carriers that covered you.

Q. What are typical costs of remediation and legal expenses associated with contamination?

A. The cost estimates with investigating contamination associated with dry cleaners can range between $30,000 and over $500,000–depending on the extent of the site contamination, the site geology and whether groundwater beneath the dry cleaning businesses can be used for drinking. Legal expenses can oftentimes go into the six figures, while site remediation can cost between $50,000 and over $1,000,000.

Larger, industrial remediations can range into the tens of millions will the lower end of costs being closer to $1,000,000. Investigations and time-critical interim actions or temporary mitigations alone can easily top $1,000,000, and legal expenses could also easily top $1,000,000.

Q. How does Insurance Archeology help dry cleaners and other property and small business owners obtain site closure?

A. In short, insurance archeology is the term given to finding old insurance policies. These old policies, used appropriately, can pay for the costs of site investigation, including soil and groundwater contamination studies, finding other potentially responsible parties (PRPs) that caused contamination (past owners and operators), assessing the cleanup costs and developing the facts of the case. In many cases the insurance will pay for the site cleanup or other suitable settlements. Additionally, though the insurance companies actually pay for the defense related costs, it is the policyholder that gets credit for spending the money for cleanup. For most clients, reaching the end of contamination begins with finding the policies. 

To find out if you have historical assets, contact us for a Confidential Insurance Archeology® consultation. 

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Kristen Drake brings more than a decade of research and managerial experience in broadcast journalism to the field of insurance archeology. Since joining the PolicyFind team in 2015, Mrs. Drake has successfully documented liability insurance programs on behalf of municipalities, manufacturers and dry cleaners. She continues to translate her expertise in source procurement and digital fact-finding, performing insurance research activities at a very high level, providing on-time execution of contracted performance goals.

 

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The recent Wisconsin Supreme Court ruling that Steadfast has the right to recover from Greenwich Insurance Company due to Greenwich breaching their duty to defend provides insurers direction on how defense costs should be shared. This ruling adds to the ongoing debate about the consequences of an insurer’s breach of the duty to defend.

Case Background

In 2008, raw sewage backed up into more than 8,000 Milwaukee homes. Lawsuits by homeowners were brought against the Milwaukee Metropolitan Sewage District (MMSD) and two companies, United Water and Veolia -both of whom operated and maintained MMSD’s systems during different time periods. United Water was insured by Greenwich with MMSD as an additional insured, and Veolia was insured by Steadfast, which also named MMSD as an additional insured. This made MMSD an additional insured on two general liability policies that provided coverage for negligence during successive policy periods.

When MMSD filed claims with Steadfast and Greenwich, Steadfast defended, providing coverage in MMSD’s defense and reimbursed MMSD for 1.55 million in defense costs. Greenwich did not defend, and then further denied MMSD coverage a year later when a renewed tender was filed. Greenwich stated that its reason for not defending was that the language in its policy’s “other insurance” clause made its coverage excess insurance to the Steadfast policy.

The lawsuits against MMSD were eventually settled without MMSD paying any damages.

The Breakdown of Steadfast Insurance Company v. Greenwich Insurance Company

Steadfast brought a subrogation action against Greenwich to recover the $1.55 million in defense costs it had paid to MMSD.

• Circuit Court granted summary judgment to Steadfast for the full $1.55 million, ruling that Greenwich breached the duty to defend and therefore waived its rights to raise coverage defense. Additionally, the Circuit Court awarded Steadfast $325,000 in attorney fees incurred in the subrogation action.
• Court of Appeals reasoned that it would be inequitable to reward Greenwich for its flagrant breach of contract by assigning to it only a proportional share of the costs of defending MMS, and therefore assigned 100% of the defense costs to Greenwich.
  • The Court of Appeals had found that the Greenwich policy was not excess but rather primary insurance and that Greenwich therefore had a duty to defend MMSD which it breached. Once it breached, the Appeals court found, Greenwich was responsible for all defense costs and must reimburse Steadfast for the money it had spent in MMSD’s defense, plus attorney’s fees.
  • Greenwich had argued that should the court find it responsible for defense costs, they should be allocated among all insurers. The Appellate Court had ruled otherwise because Greenwich’s correspondence had acknowledged that there may be a potential for coverage, yet Greenwich had never taken the procedural steps Wisconsin courts had established by which insurers denying coverage might protect themselves from breach of contract and the remedies that may flow from that breach.
• On January 25, 2019, the Wisconsin Supreme Court in its majority opinion agreed with the Court of Appeals that the policies were primary, not excess. Also, it agreed that Greenwich had breached its contractual duty to MMSD. Where it parted company with the Appellate Court however was in how it would allocate the shares of defense costs between insurers.
  • The Supreme Court noted in its opinion that both Steadfast and Greenwich had a duty to defend under the MMSD policies. Even though Steadfast, unlike Greenwich had defended MMSD under its policy, the Supreme Court still found that pro rata allocation was the proper method of determining the insurer’s share of defense costs. It decided to use each insurer’s policy limits as the best means of apportioning defense costs. Where Steadfast’s policy limit was $30 million and Greenwich’s limits were $20 million, it found that Steadfast was responsible for 3/5 and directed Greenwich to pay the remaining 2/5 of the defense cost.
  • The Supreme Court’s majority opinion found no problem with the Court of Appeals analysis that Steadfast’s policy had language giving it the right of subrogation to any claims that MMSD might have, Steadfast’s claim to “stand in the shoes” of MMSD was based in contract. In this capacity, it reasoned, Steadfast was also entitled to a recoupment of the attorney’s fees it had incurred on MMSD’s behalf to prove Greenwich’s coverage.
  • However, the Supreme Court noted that this was a case of first impressions in Wisconsin. Never before had a Wisconsin court awarded attorney’s fees for a breach of a duty to defend to an insurer that was subrogated to an insured’s rights.
  • Therefore, the Court looked to other jurisdictions to see how this had been handled there. It decided that Florida and California’s rulings were persuasive in this regard. It therefore found that there was no reason to create an exception to the long-standing rule that contractual subrogation entitles the paying party to the rights, remedies or securities that arise from a specific subrogation clause upon payment by a subrogee.
  • Thus, it upheld the Court of Appeals decision that Greenwich should compensate Steadfast for the attorney fees incurred in its efforts to get Greenwich to cover MMSD.

What’s worthy of note here is that Wisconsin Supreme Court’s opinion in this case was not unanimous. Three Supreme Court Justices dissented from the majority opinion, two arguing against the allocation of defense costs where there was such a unilateral refusal to defend. Allowing Greenwich to only pay part of the whole defense cost, the two stated, was rewarding it for its refusal to abide by Wisconsin law and utilize the legal framework the Court had put in place to check the errant insurer. They judged that the majority’s opinion encouraged insurers to play “a game of chicken” when more than one insurer insured the same risk. A third Justice agreed with the majority that prorated allocation was the best way to apportion defense costs but expressed the opinion that Greenwich should not have been held responsible for any portion of the defense costs because Greenwich’s policy was excess to Steadfast’s policy.

Main Takeaway

The new Wisconsin Supreme Court decision allowed for an equitable allocation for carrier found in breach of duty to defend, rather than shouldering the entire cost of defense. This could provide insurers a reason to strategize against other carriers on claims.

Future decisions will determine if the Steadfast case represents a significant change in how carriers address the duty to defend.

The more policies found and tendered on a claim the better for the policyholder. Find out how we can recreate a comprehensive past insurance coverage portfolio for your clients through our insurance archeology services

Author Bio
Dave O’Neil, JD, Director of Investigations
Dave has over 20 years of experience in claims recovery on behalf of corporate policyholders involving environmental property damage, toxic tort, and asbestos exposure claims. He has worked on over 700 projects including the reconstruction of insurance coverage for the countrywide roll up of the largest waste disposal company.

There are currently approximately 9,300 lawsuits pending in the nation.

Glyphosate is the main ingredient found in weed killer chemicals like Round-up and Ranger-Pro, both made by Monsanto (nka Bayer). Claims and lawsuits are popping up throughout the nation by users of these products, alleging that Glyphosate causes Non-Hodgkin’s Lymphoma (a cancer affecting the lymph nodes) and other cancers. Claims are also being made asserting that Glyphosate is killing off the bee population.

What is Glyphosate?

Glyphosate was marketed by Monsanto (Bayer) in 1974 under the name of Round-up and later Ranger Pro. Round-up is the pre-mixed formula marketed to the general consumer. Ranger Pro is a more potent formula that must be mixed by the user and can only be purchased from commercial dealers.  Glyphosate was developed and used to target an enzyme found only in plants, in an effort to kill weeds. The end users of this popular weed killer are landscapers, homeowners, farmers, custodial crews, and pest control service workers, to name a few.   

What’s the Impact of Glyphosate’s on Humans?

As time passed, people began developing Non-Hodgkin’s Lymphoma and other cancers, the causal relationship between Glyphosate and cancer became the focus of some studies. One of the first studies was conducted in 2015 by the International Agency for Research, an affiliate of the World Health Organization. The study found that Glyphosate may alter DNA, and it caused cancer in lab animals. The overall statement and finding of the study is that Glyphosate “probably causes cancer”.  

Additional studies were conducted in 2016 by both the World Health Organization and the U.N. Both of these studies concluded Glyphosate is “unlikely to cause a risk for cancer”. The Critical Review in Toxicologystudy concluded there was “no causal connection between Glyphosate and cancer”. 

Glyphosate Lawsuits

As this ‘ticking time bomb’ of litigation unfolds, both sides take opposing views. Monsanto, who has been accused of manipulating the 2016 studies, claims Glyphosate is safe. Further, Monsanto claims that alleged experts are spewing unsupported evidence to implicate its product as a cancer-causing agent. Conversely, Plaintiffs’ firms allege there is enough evidence linking Glyphosate and cancer, and that Monsanto is behind the biased studies in its favor.  

In a recent California case, Monsanto argued that latency period is a relevant factor when considering the potential affects of Glyphosate. Monsanto claimed the normal latency period for blood-related cancers is falling short. On the other hand, Plaintiffs argue Monsanto knows the dangers of its product and has been hiding information and failing to warn consumers of potential dangers.

The Dewayne Johnson v. Monsantoverdict that came down in 2018 has raised the profile of the impending explosion of Glyphosate litigation. In this California case, a school groundskeeper developed Non-Hodgkin’s Lymphoma and sued Monsanto for his occupational exposure to using Round up and Ranger Pro. The jury awarded the plaintiff $289 million ($39 million compensatory damages) and the remainder in punitive damages. The judge reduced the verdict to $78.5 million.  

What’s Next?

There are currently approximately 9,300 lawsuits pending in the nation. In the Multi-District litigation in California, around 600 cases have been consolidated. As the litigation escalates on this topic, new studies will begin to unfold that will likely produce a more solid foundation of evidence which will weigh in one party’s favor. On which side the scales of justice will fall remains unknown for now, but the litigation continues to grow exponentially.

PolicyFind™ is an insurance archeology firm and the nation’s leader in locating historical insurance coverage that applies to latent injury claims and environmental claims.  

If you represent clients whom are impacted by this litigation or by this emerging issue, contact us for a confidential consultation.  

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LEARN HOW POLICYFIND USES INSURANCE ARCHEOLOGY TO PUT THE POWER OF THE CGL POLICY BACK IN THE HANDS OF THE POLICYHOLDER

BY: KRISTEN DRAKE

Over 25 years ago, EnviroForensics and PolicyFind’s CEO Steve Henshaw, P.G. discovered the power contained within historical commercial general liability (CGL) insurance policies in the face of a lawsuit or an environmental issue. Henshaw discovered and has since proven, that using a company’s historical CGL insurance policy is an effective funding source to pay for the expensive cost of investigating and cleaning up environmental contamination.

WHAT ARE COMMERCIAL GENERAL LIABILITY INSURANCE POLICIES?

CGL insurance policies are purchased by business owners to cover them against their business’ liability exposures. This is very important in determining whether an individual or business’ old insurance policies can be used to pay for environmental investigations and clean-ups.

This makes CGL policies very important protection for corporate policyholders because they broadly provide defense and indemnity coverage against claims for bodily injury and property damage. Coverage includes products, completed operations, premises, and operations, elevators, and independent contractors, to name a few.

 

HOW DO “HISTORICAL” COMMERCIAL GENERAL LIABILITY INSURANCE POLICIES WORK?

In general, CGL policies have included and even excluded environmental pollution and contamination language like “unexpected and unintended releases.” Such unexpected and unintended releases mean accidental releases or accidental spills, not intentional releases, which would be better defined as dumping or disposing. CGL policies were not covering individuals and businesses for pollution or contamination associated with dry cleaning operations. A separate environmental policy would be required to cover environmental pollution and contamination.

So, if you or your business bought CGL insurance before the policies contained absolute pollution exclusion language, you are likely to have insurance coverage that can address environmental contamination, even if that contamination has only been recently discovered.

In addition, old policies provide a defense against a claim or suit. In some states, a claim or suit could be a letter from the regulatory agency or a neighboring property owner demanding a response to identified environmental contamination. In other states, the courts have determined that the insurers must only defend an actual lawsuit.

‘OK’, you might ask, ‘that sounds great, but what if I can’t find my old policies or policies that were bought by the former owners?’ Well, those old policies can still be found. While there is no guarantee, contacting an expert insurance archeologist increases your chances of finding old policies or evidence of old policies. PolicyFind, a division of EnviroForensics, boasts an 85% success rate at finding old insurance policies or evidence of old policies.

 

USING YOUR POLICIES FOR DEFENSE AND INDEMNIFICATION

After finding the old policies, it is then critical that you know how to use these policies to your benefit. Insurance law is different from state to state and not every state has good law for the policyholder. Insurance policies contain different language which can vary by carrier and by policy period.

In pulling this concept together:

• A defense includes paying for lawyers dealing with the environmental contamination. A defense would also include quantifying an individual or business’ exposure and liability. The only way to quantify environmental liability is to collect environmental samples (e.g. soil, soil gas, indoor vapor, groundwater). It would also mean determining how expensive a cleanup would be, which means that, aquifer tests, feasibility studies and remediation technology evaluation should be covered.
• Indemnification is the process where the insurer brings the insured back to where they were before the damages occurred, as stipulated within the insuring agreement. In other words, indemnification makes the insured ‘whole’ again by paying for damages or losses already sustained and expenses already incurred.

PRACTICAL APPLICATIONS OF YOUR CGL POLICIES

Historical insurance policies can be beneficial in providing coverage for a number of different situations. For example:

• Plumbing and building supply companies defending product liability claims from exposure to products sold containing asbestos.
• Municipalities involved in litigation.
• Manufacturers of pumps defending product liability claims from exposure to asbestos gaskets.
• Churches and schools defending personal injury claims.
• Dry cleaners defending against environmental property damage claims brought by neighboring business property owners.
• Business property owners defending property damage claims by state environmental authorities.
• Insurance companies defending policyholders against environmental property damage claims and wishing to document insurance coverage of other potentially responsible parties.
• Real estate developers, environmental consultants, attorneys and regulatory agencies.

WHAT YOU CAN USE CGL POLICIES TO FUND

 

The process of using old insurance policies has many parts. There may be an insurance archeology component, a legal component and an environmental component and they all have to work together. Understanding all aspects of the process is not your job, that’s why you hire experts to uncover your insurance assets.

EnviroForensics and PolicyFind have successfully used the historical insurance of businesses, individuals and even defunct and bankrupt companies as sources of funding to pay for the investigation and cleanup of contaminated sites.

There are billions of dollars in unclaimed assets available to parties looking to defend environmental claims and personal injury claims. PolicyFind works diligently every day to put the power of the policy back in the policyholder’s hands – where it belongs.

Call PolicyFind’s insurance archeology experts today at 866-888-7911 or fill out our form.

PolicyFind clients commonly face immense challenges and deadlines, and they rely on our strengths to provide solutions for them. Our team understands the unique set of circumstances that businesses face when liabilities from past business operations arise. With our help, they can overcome their inevitable feelings of anxiety, powerlessness, and uncertainty.

 

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Kristen Drake brings more than a decade of research and managerial experience in broadcast journalism to the field of insurance archeology. Since joining the PolicyFind team in 2015, Mrs. Drake has successfully documented liability insurance programs on behalf of municipalities, manufacturers and dry cleaners. She continues to translate her expertise in source procurement and digital fact-finding, performing insurance research activities at a very high level, providing on-time execution of contracted performance goals.

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By Kristen Drake, Director of Operations, PolicyFind

The recent ruling in E.M. Sergeant Pulp & Chemical Co v. Travelers Indemnity Co.. continues to build a strong case for policyholders in the state of New Jersey.

The Case Background

In 2004, E.M. Sergeant Pulp & Chemical Co. in New Jersey, a distributor of heavy industrial inorganic chemicals and raw materials, was notified by the Environmental Protection Agency (EPA) that they were a Potentially Responsible Party (PRP) for part of the Diamond Alkali superfund site. According to the EPA’s Technical Report Data, multiple companies used the site for chemical manufacturing over the past century leaving behind two key contaminants, dichlorodiphenyltrichloroethane (DDT) and dioxin, in the soil, groundwater, air, and debris.

In 2009, E.M. Sergeant Pulp & Chemical Co. was sued as a third-party defendant in a lawsuit alleging property damage caused by environmental pollution from activities that occurred 50-75 years ago. Being a PRP, meant they were liable for the cleanup.

The insurance company denied it had issued any policy, so E.M. Sergeant Pulp & Chemical Co. sued the insurer for coverage. Even though E.M. Sergeant Pulp & Chemical Co. couldn’t provide any insurance policies, they did provide:

1. Four pages of handwritten entries in its bookkeeping ledgers
2. An application submitted to another insurer in 1964
3. A note relating to the application
4. Certain standard policy forms obtained from the insurance company in discovery
5. Expert testimony from an insurance archeologist, who expressed their opinion that the missing policies provided coverage for “public liability”, including third-party bodily injury and property damage, and coverage was continuous from 1948-1965.

In 2017, Travelers Indemnity Co. reached a settlement with E.M. Sergeant Pulp & Chemical Co. based on the ‘secondary’ policy evidence and expert testimony from an insurance archeologist.

What The Verdict Means To Policyholders

The case of E.M. Sergeant Pulp & Chemical Co. v. Travelers Indemnity Co., demonstrates how every little piece of evidence can be crucial to proving that past coverage was issued. While the documentary evidence of coverage was “scanty”, the insurance archeologist’s ability to provide evidence that E.M. Sergeant Pulp & Chemical Co. had insurance to cover property damage with Travelers Indemnity Co. for the period of 1943-64 along with their expert testimony, was sufficient to prove coverage, according to Judge Kevin McNulty.

This case is proof that historical insurance policies, even with little evidence, can still provide coverage in New Jersey–highlighting the importance of an insurance archaeologists’ work.

Three Takeaways From The Case

1. E.M. Sergeant Pulp & Chemical Co. strengthened its ‘secondary’ evidence with four ledger entries and expert testimony from an insurance archeologist.
2. The existence of full policies is not always necessary to prove coverage.
3. The physical policies were missing, yet the court relied heavily on an insurance archaeologist’s expert testimony.

While historical insurance policies may be considered “just old paperwork” by some, they can potentially provide millions of dollars in coverage. This makes them valuable assets, especially for environmental remediation projects such as site cleanup, compliance obligations, and third-party legal actions.

What Does This Mean for Business Owners?

It’s a common belief that companies and organizations need to pay for environmental remediation out of pocket if their business’ historical Commercial General Liability (CGL) insurance policies have been lost or destroyed. While this belief is pervasive, PolicyFind can help policyholders through Confidential Insurance Archeology® and expert witness services to find insurance coverage, fill in the historical gaps and serve as an expert witness.

If You’re a Policy Holder, Here’s Three Tips For Getting Started

1. Contact a confidential insurance archeologist to assist you as you start assembling your coverage case.
2. Check your historical records and see what you have available. (Gather. Collect. Review.)
3. Try to call insurance agents you’ve worked with in the past to fill in any missing information, and rely on your insurance archeologist to pull everything together.

Contact PolicyFind for a free and confidential consultation to learn how our expert insurance archaeologist’s can uncover historical CGL insurance coverage.

Contact PolicyFind

For more information on historical insurance archaeology, read our Insurance Archeology 101 and The Hidden Power of Historical Commercial Insurance.

 

Kristen Drake brings more than a decade of research and managerial experience in broadcast journalism to the field of insurance archeology. Since joining the PolicyFind team in 2015, Mrs. Drake has successfully documented liability insurance programs on behalf of municipalities, manufacturers and dry cleaners. She continues to translate her expertise in source procurement and digital fact-finding, performing insurance research activities at a very high level, providing on-time execution of contracted performance goals.

 

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