Managing Director, Kristen Drake, looking over old files.
By Kristen Drake
For most, the end of each year brings a time of reflection; our team at PolicyFind is no exception.
As we look back on the past year, one of PolicyFind’s key accomplishments was the opportunity to assist owners and operators of dry cleaning shops in locating funds for environmental liabilities through our Insurance Archeology service line.
However, this accomplishment does not distinguish 2018 from any of its previous 20+ years in this industry. We have consistently provided top-notch services of this nature and will continue for years to come. We are proud to be a trusted partner to drycleaners throughout the country.
What sets 2018 apart, for our team, from previous years, is the expansion of our services to municipalities. Our Insurance Archeologists saw an increase of cities and counties requesting our assistance for abandoned ‘eye-sores’ in their communities. In most cases, the municipalities were ‘left holding the bag’ on (in some cases) dozens of properties in need of serious funding in order to be redeveloped, due to previous operations that led to environmental impacts.
Municipalities Can Utilize PRP Searches, Insurance Archeology, Litigation Support & Cost Recovery Service Lines
Local municipalities learned that through PolicyFind’s PRP Searches, they could identify prior owners and operators of these now abandoned locations.
PRP is short for ‘potentially responsible party’. These searches are the cornerstone of PolicyFind’s investigations, as they are the efforts made to identify previous owners and operators of now-abandoned properties.
In most cases, once PRP’s were identified, PolicyFind was then able to investigate these former dry cleaning shops, gas stations, plating facilities, chemical producers, etc. (the industry list goes on and on), and conduct investigations to locate evidence of former CGL coverage that could be applied to these long-tail environmental claims.
Once located, historic insurance policies can be used to bring funding into the hands of municipalities, as current property owners, vis a vis PolicyFind’s Litigation Support and Cost Recovery service lines. PolicyFind is a full-service firm, providing assistance and consulting to our clients, through each step of the process.
PolicyFind is proud of the strategic relationships it has built within the legal community. These relationships bring benefit as we link municipal legal teams to experts, thereby facilitating the development of strategies to maximize the potential of these newly discovered historic policies.
There is no ‘one-size-fits-all’ solution for each property ownership situation municipalities face. PolicyFind prides itself on its ability to assess, analyze, and successfully navigate through each circumstance with individual attention and a proactive approach.
Eyes Forward in 2019
It is our goal to assist more cities and counties throughout the country in 2019.
Municipalities know that abandoned properties cost them money. These sites still need to be properly maintained, and moreover, they can lead to increased crime, fire runs, and loitering.
PolicyFind knows, and wants to continue to share with potential clients, that through the process of insurance archeology, we can help kick-start the redevelopment of (seemingly hopeless) abandoned properties.
If you have a contaminated property and want to find out if others contributed to the contamination, contact us today!
Kristen Drake combines her profession as an insurance archeologist with 10+ years as an investigative journalist to reconstruct historical insurance coverage for clients. She has successfully located evidence of liability insurance coverage on 150+ projects.
This is a case study about how insurance archeology ensured the insurance carriers would defend the developers against lingering asbestos claims.
The RMS Queen Mary located in Long Beach, California.
The retired British battleship the RMS Queen Mary was converted into a refurbished hotel in 1971 by H.G. Smith Construction Co. and Amelco Corporation as a joint venture, Smith-Amelco. Their employees retrofitted the ship with asbestos insulation and remodeled the decks turning the warship into a lavish hotel.
Over forty years later, some of the Smith-Amelco workers alleged that working with insulation onboard the ship was the cause of their mesothelioma lung cancer cases. The joint venture between the two companies Smith-Amelco was short-lived. PolicyFind™ was asked to find proof of Smith-Amelco’s former insurance coverage.
PROBLEM
The owners of the RMS Queen Mary hotel gave Smith-Amelco’s attorney and the attorneys for the other litigants one day to review records onboard the ship. PolicyFind was tasked with searching for documents identifying the commercial general liability (CGL) insurance coverage below the ship’s deck. There were nearly one hundred cardboard boxes stored in tight quarters at the very bottom of the ship. There were 20+ paralegals and attorneys searching through these boxes to uncover proof of insurance. After forty years below the ship’s deck, the boxes were so fragile that they collapsed when touched, leaving their contents in disarray.
PolicyFind’s Director of Investigations, David O’Neill continued searching through the piles of crushed cardboard and spilled documents long after the others had quit and left the lower deck. It seemed that he would be unable to fulfill his duty onboard the Queen Mary.
SOLUTION
O’Neill stayed determined and continued sifting through scattered documents and found proof of insurance coverage. As O’Neill was continuing to sift through documents scattered on the floor, he found an additional piece of evidence. This made the case stronger and established the existence of a CGL policy, which was the proof of insurance O’Neill needed to move the case forward.
RESULTS
With these two pieces of evidence, Smith-Amelco’s attorney, was able to file the asbestosis claims with enough proof of historical CGL insurance coverage. The proof of insurance coverage was used to fund the attorney fees and ensured the insurance company defended Smith-Amelco against the lawsuit.
Call PolicyFind’s insurance archeology experts at 866.888.7911 or fill out our contact form.
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.
Hiring a proven Insurance Archeologist can help your company uncover millions of dollars in usable insurance assets to cover legal fees and pay for investigation and remediation of environmental contamination.
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.
Insurance archeologists have the knowledge-base to find evidence of CGL policies, and advise clients on how those policies can be used. Frequently clients say hiring an Insurance Archeology team was one of the best investments they’ve made and helped further their company’s success.
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
Once triggered historical commercial general liability (CGL) policies may be used to for legal fees, defense against claims, site investigation, remediation/cleanup, interim remedial measures, building legal case, potentially responsible parties (PRP) search, interfacing with agencies and prior costs be may be retroactively recovered.
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.
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.
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:
Four pages of handwritten entries in its bookkeeping ledgers
An application submitted to another insurer in 1964
A note relating to the application
Certain standard policy forms obtained from the insurance company in discovery
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
E.M. Sergeant Pulp & Chemical Co. strengthened its ‘secondary’ evidence with four ledger entries and expert testimony from an insurance archeologist.
The existence of full policies is not always necessary to prove coverage.
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
Contact a confidential insurance archeologist to assist you as you start assembling your coverage case.
Check your historical records and see what you have available. (Gather. Collect. Review.)
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.
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.
Over 25 years ago, 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 environmental issue. He then assembled a team of Insurance Archeologists, led by David O’Neill, J.D., to perfect a process of unearthing and reconstructing CGL coverage for companies and organizations representing a diverse span of commercial sectors. Over the next few decades, PolicyFind built its reputation for success by locating over $5 billion dollars of usable funding for policyholders.
Our 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.
Time after time, our clients tell us that hiring an Insurance Archeology team was one of the best investments they’ve made in their company’s success. Once historical coverage information is discovered, it opens a door to potential funding for their current liabilities, and can be considered an indispensable resource for any unfortunate FUTURE situations.
PolicyFind works diligently every day to put the power of the policy back in the policyholder’s hands – where it belongs.
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.
[author] [author_image timthumb=’on’]https://i0.wp.com/www.policyfind.com/wp-content/uploads/2015/12/oneill_dave.jpg?zoom=2&w=1080[/author_image] [author_info]Director of Investigations, Insurance Archeology[/author_info] [/author]
Indiana contractors seeking indemnity from their subcontractors will want to pay heed to a recently published opinion by the Court of Appeals of Indiana regarding a case in which a subcontractor’s failure to make the claims payment required in its self-insured retention endorsement left the contractor without coverage under that policy.
In what it called “a case of first impression,” the Appellate Court recently upheld a summary judgment by the Lake County Superior Court in favor of the insurer in a case styled Walsh Construction Company v. Zurich American Insurance Company.
Walsh Construction was sued by a motorist injured in a work zone of an Interstate Highway improvement project. The motorist alleged that the injury was due to an unsafe traffic pattern. Walsh Construction’s subcontractor, Roadsafe Traffic Systems, Inc. had been working on this section of the highway and had entered into a contract with Walsh Construction requiring it to provide a “safe traffic pattern” through the work zone. The contract also required Roadsafe to indemnify Walsh for any failure or negligence in its work and name Walsh Construction as an additional insured on its CGL policy.
When Roadsafe neither indemnified nor defended Walsh in court as its contract required, Walsh put Roadsafe’s insurer (Zurich American) on notice of the motorist’s claim, seeking a defense under Roadsafe’s policy. The policy Roadsafe had purchased was a policy that included a “$500,000 per occurrence self-insured retention endorsement” that required it to pay “all damages and ‘pro rata defense costs’ for each ‘occurrence’ until you have paid damages equal to the Per Occurrence amount.” When Zurich denied Walsh’s request, Walsh filed a declaratory judgment action and Roadsafe joined in, seeking coverage for Walsh under its policy. After a hearing, the court entered summary judgment for Zurich, stating that given these facts, Zurich had no obligation to cover Walsh as an additional insured on Roadsafe’s policy.
Walsh appealed the pro-Zurich judgment. The Court of Appeals determined that the question presented was “whether the SIR endorsement amended Zurich’s obligation under the CGL policy to defend Walsh.” Walsh and Roadsafe argued that while the SIR endorsement amended Zurich’s obligation under the policy with respect to Roadsafe, it did not do so with respect to Walsh.
The Court found precedent for the rule that an insured’s duty to defend is not triggered unless and until the SIR has been exhausted, however it determined that “the question of whether a SIR applies only to the insurer’s relationship to the named insured or also applies to additional insureds was a question of first impression” for Indiana courts.
The Court noted that the language of the Zurich SIR endorsement obliged the named insured as follows:
“If a Per Occurrence [amount that the named insured or any additional insured
Must pay] is shown….., [the named insured] shall be responsible for payment of all damages and ‘pro rata defense costs” for each ‘occurrence’[] until [the named insured] has paid damages equal to the Per Occurrence Amount…..”
The Court found that this and other parts of the policy “unambiguously manifest the intent of the parties (Zurich and Roadsafe) for the SIR endorsement to control their relationship such that Roadsafe assumed all costs and liability for the first $500,000 of any claim that might be made under the CGL policy, regardless of whether that claim was against Roadsafe or an additional insured.” The fact that Roadsafe had not satisfied this requirement meant that Walsh’s coverage under that policy remained untriggered and because no claim was yet made against Roadsafe, it could not offer settlement to satisfy the SIR amount.
On February 10, 2017, the U.S. District Court for the Western District of Washington issued its opinion in King County v. Travelers Indemnity Co. et al. The District Court held in that case that letters from state and federal regulatory authorities designating the County as a PRP at a property damage site were the “functional equivalent of a suit,” triggering its insurers’ duty to defend under its historical general liability insurance policies.
Although its insurers argued that mere PRP notice letters were not “adversarial and coercive” enough to trigger a duty under their policies, the District Court found that the USEPA and Washington State Department of Ecology had “assumed an adversarial posture by exercising their statutory authority to designate King County as a strictly-liable PRP.” In its opinion, the court reasoned: “Once a party bears the scarlet letters ‘PRP,’ it may be called upon at any time to assume responsibility for the cleanup effort.”
Noting that both CERCLA and the Washington state MTCA are “strict-liability schemes that require responsible parties, once notified, to participate in and fund all remedial action,” the District Court found that once notified, “It makes no difference whether an insured voluntarily cleans up contamination or waits until government intervention—it is liable either way.”
The King County decision relied on the Washington Court of Appeals 2014 ruling in Gull Industries v. State Farm. In that case, the court had found that the term “suit” in general liability policies was ambiguous and may encompass claims for administrative enforcement actions if they are “adversarial and coercive” in nature. Noting that the Gull Industries decision had gone for the insurer, Travelers argued that the PRP notices in the King County case were “exactly the type of letter that the Gull court expressly found did not trigger a duty to defend.” The District Court however distinguished between the letters in Gull and those in King County, noting that the agency letters to Gull Industries stated that it had not yet determined that it was a PRP, while in the King County case the PRP designation was clear. The DOE’s letter in Gull had been a “passive acknowledgement” that voluntary remediation was underway. The Kings County letters clearly identified it as a PRP.
Increasingly, America’s civil courts are demanding that insurance defense attorneys be duly diligent in the handling of their client’s evidence of applicable insurance. Where attorneys fail to investigate and present what coverage may be available in their client’s insurance portfolio, they risk court sanction.
Tenth Circuit Upholds Counsel’s Duty to Investigate Coverage
Federal Rule of Civil Procedure 26(a)(1)(A)(iv) requires that parties to civil litigation in possession of insurance policies that may provide coverage be forthcoming even before discovery requests for insurance policies are made. It reads:
“[A] party must, without awaiting a discovery request, provide to the other parties… any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment.” Fed. R. Civ. P. 26(a)(1)(A)(iv).”
So when Sun River Energy’s trial counsel argued before the District Court that it had born no duty to examine his client’s Director’s & Officer’s Liability insurance policy to see whether it provided coverage for securities violations and present it to opposing counsel, the 10th Circuit Court of Appeals found his argument wanting. In the case styled Sun River Energy v. Nelson decided in September, 2015, the appellate court determined that the District Court had not abused its discretion in sanctioning trial counsel for not disclosing its client’s policy until coverage had lapsed. It ruled that the attorney’s obligation “inherently includes an exercise of legal judgment regarding the possible availability of coverage under the specific terms of any insurance policies held by a party.” Where Sun River’s trial counsel “never took a serious look at whether there was applicable insurance,” the appellate court found that sanctions were in order even without a finding of intentional misrepresentation.
North Carolina Attorney Sanctioned for Failing to Disclose Umbrella Coverage
Not only is it necessary to investigate insurance coverage and present it to opposing counsel in discovery but it is necessary to present all the evidence of insurance in the client’s possession in addition to that policy under which you are providing a defense. In the recent case styled, Inc. Palacino v. Beech Mountain Resort, the U.S. District Court for the Western District of North Carolina found it necessary to sanction an insurance defense attorney for failing to properly discuss and review applicable insurance in her client’s insurance program. There, the attorney had revealed the first $1 million layer of commercial general liability insurance coverage but had failed to make additional inquiry that would have revealed a $10 million umbrella policy above the underlying coverage.
Insurance Archeology a Necessary Part of Defense
Given the growing insurance expertise demanded of insurance defense counsel, the hiring of an insurance archeologist to assist in the preparation of insurance evidence during discovery makes increasing good sense. Defense attorneys can likely protect against sanctions by showing that they were duly diligent in the accumulation and evaluation of applicable insurance documents at trial.
It’s 2016 and technology is everywhere. I have a chip in my debit card, a watch that makes phone calls and I watch television through a device called “Roku”. But, as an Insurance Archeologist, my work life is spent looking for a paper trail.
I spend hours searching for insurance policies. Specifically, I look for policies that can cover environmental contamination costs.
As you will read in other blogs on this site, if you are a business owner who purchased Commercial General Liability insurance for your business before policies contained absolute pollution exclusion language, you are likely to have insurance coverage that can address environmental contamination.
Insurance archeology is an important term for all business and property owners to know. For anyone unsure of the services and benefits of hiring an insurance archeologist, or anyone who has contemplated hiring one, here are four frequently asked questions related to insurance archeology.
Kristen Drake combines her profession as an insurance archeologist with 10+ years as an investigative journalist to reconstruct historical insurance coverage for clients. She has successfully located evidence of liability insurance coverage on 150+ projects. 
