ECBM's Blog: Information To Protect What You Grow

The green movement is a product of our collective concern for the earth, global warming, and the future of our planet. Though the movement has been strong for decades, with the environmental protection act rolling out in the ’70s, it wasn't until recently that the need for change became obviously critical. At the same time, manufacturing, energy companies, and what some would now call “bio-hazardous” industries have grown exponentially. For the insurance industry, the energy sector has been a strong market and held a large capacity for growth. Now with social and economic pressures facing the energy sector and its insurers, the landscape of the market has changed significantly. While some may assume that The Green Movement is a threat to the insurance industry, there is quite a bit of opportunity within it as well. As the energy industry adjusts to the needs of society, the insurance industry will also adapt accordingly, and create new policies that represent new needs.

Pollution liability can be a major problem for trucking companies. Typical business automobile liability insurance policies exclude coverage for losses caused by the release of pollutants. These policies define pollutants broadly as any irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. At some point, most trucking companies will transport something that qualifies as a pollutant just given the broadness of the definition. Therefore, the pollution exclusion in the traditional policy can create a major gap between a company’s risk exposures and their insurance coverage.

Pollution liability for trucking companies can get very complicated. Determining what you may be covered for and what you may not be can cause major headaches while costing your company money. Trucking companies have significant exposures in this area, and the language of the standard commercial automobile liability policy and federal law do not help.

Indemnification clauses in commercial contracts can present a number of potential issues.  When the parties to the contract do not properly think through or write out indemnification provisions to address these issues, it can lead to costly and dangerous unintended consequences.  Companies need to think through exactly what they mean when they seek indemnification from a contracting party and ensure their approach to indemnification issues comports with their approach to their insurance coverage.

Cyber attacks and hacking is the newest foe businesses must deal with.  The World Wide Web and the rise of the Internet of Things has created a portal that allows hackers right into your business- it's as if they just walked through the front door!  

If the CIA, FBI and IRS can be hacked, so can your business.  How would you defend yourself against a cyber breach? Updating your security is a start, but current best practices also include backing up this plan with an insurance solution. This combination is the only true protection for your company.  

Almost all personal and business automobile insurance policies exclude coverage for losses caused by pollutants. There is an exception in the case of materials necessary for the function of a vehicle- provided those items were leaked or released from somewhere other than their natural storage or use location.  

This can lead to a large uninsured loss exposure for companies regularly engaged in the transportation of a wide range of products that can be considered pollutants.  Companies unsure of their coverage could face large losses, including civil judgments and large fines, that put the future of the company in jeopardy.

There are approximately 557 coal fired power plants in the US.  In Pennsylvania alone there are 40.  Throughout the years, coal was the “go to” fuel source for about 44% of the electric power in this country.  Now new EPA regulations will make it necessary to move power generation in a different direction. These old coal-fire power plants are not necessarily shutting down- many of these facilities will be repowering with other fuel sources.

Some of the older and smaller coal fired plants will be deactivated by 2016.  Their replacement or conversion to another fuel source will be too expensive to undertake.  Others will contemplate the options, but with the abundance of natural gas now available in the US, this is a likely alternative.

In May of 2015, the Environmental Protection Agency (EPA) released a new regulation that would change the definition of the “Waters of the United States.” (H.R.1732) The EPA asserts that its new rule does not increase the amount of waterways covered by its authority, but the suggested rule has proved to be quite controversial. The Senate has already started to propose legislation to undo this new regulation due to the financial concerns for businesses.

Drones are barely (if even that) legal for use by businesses at this time, but the drone industry is already predicting massive economic impacts. Estimates have put the number of commercial drones in operation by 2018 at around one million. Other prognosticators expect the drone industry to be a $14 billion within the next three years. Some of the industries expected to benefit from this technology include agriculture, realtors, researchers, and media.

Pipelines are the arteries of the natural gas industry. The necessity to move product efficiently is paramount to a profitable industry. Having said that, pipeline debates have begun among residents as well as environmentalists across the State of PA as to the pros and cons of a pipeline in “my backyard”.