Chapter 14 Environmental Liability Insurance Flashcards Preview

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Flashcards in Chapter 14 Environmental Liability Insurance Deck (21)
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1

What type of insurance can be purchased to cover potential liability for removal of asbestos-containing materials?

asbestos abatement liability insurance

2

What types of insurance policies are written on an occurrence basis (claims can be filed at any time provided the occurrence happened during the policy term)?

Asbestos abatement liability
lead based paint abatement liability
asbestos in place insurance

3

What twelve types of situations can be covered by Pollution Legal Liability Insurance?

-claims from on-site cleanup of unknown preexisting conditions triggered by discovery or a third-party claim

-Claims for on-site cleanup of new conditions triggered y discovery or a third party claim.

-Third-party claims for personal property damage caused by on-site pollution

-Third-party claims for bodily injury caused by on-site pollution

-Third-party claims for cleanup costs off site, resulting from pre-existing conditions

-Third party claims for cleanup off site regulating from new conditions

-Third-party claims for property damage resulting from on-site conditions

-third party claims for off-site bodily bodily injury resulting from on-site conditions

-third-party claims for off-site bodily injury, property damage, or cleanup costs resulting from conditions originating at a non owned location (insured's waste causing damage at a landfill)

-third party claims for on-site cleanup costs on, within, or under a non owned location resulting from pollution conditions originating from a non owned condition (Superfund)

-claims resulting from an interruption of the insured's business due to pollution conditions (insureds business is closed due to someone else's pollution)

-third-party claims for cleanup costs resulting from the transportation of product or waste

4

Perfect Remediation, Inc., provides both professional services and the actual physical operations for pollution abatement projects. As a result, the company can combine the contractors' pollution legal liability coverage on a claims-made basis and its professional liability coverage on a(n) __________ basis.

a. completed operations

b. standalone

c. occurrence

d. claims-made

d. claims-made

5

Which of the following is not a valid method of obtaining protection against claims of third-party bodily injured and property damage arising from asbestos abatement projects?

a. a standard CGL policy

b. ultra hazardous activities liability insurance

c. stand-alone asbestos abatement liability insurance

d. CPL (contractors pollution legal liability) insurance, without asbestos exclusions

c. stand-alone asbestos abatement liability insurance

6

What are eight costs that can be anticipated related to pollution/environmental compliance?

-capital expenditures for the best available control technology or waste minimization systems to comply with environmental laws
-environmental expertise, either in-house staff or outsourced
-administration of record-keeping and reporting requirements
-health and safety training programs required under many laws
-raw material and waste disposal expenses
-legal costs
-general business accounting for environmental costs
-costs of evaluating real estate transfer opportunities

7

All of the following are expenses regularly associated with environmental compliance EXCEPT:

a. health and safety training that is legally mandated

b. disposal of raw materials and waste

c. public relations campaigns

d. legal costs

c. public relations campaigns

8

What are nine potential sources for environmental hazards potentially found in buildings or on projects?

-building materials containing asbestos
-paint containing lead
-PCBs (polychlorinated biphenyls) in transformers and fluorescent light ballasts
-chemicals emitted by new building materials, finishes, or cleaning materials
-contaminants brought in to the building through the air and trapped inside the building
-unknown but preexisting contamination on, within, or under the property
-pollution resulting from the activities of a third party on the property
-pollution arising from building operations or processes

9

How can property owners maintain control over large-scale abatement projects and ensure adequate liability limits for contractors?

By instituting an OCEIP (owner-controlled environmental insurance program)

Main advantage is that the owner typically has one insurance policy that insures multiple parties the site

10

An underwriter needs information about on-site disposal sites. Examples of disposal sites of interest to the underwriter include all of the following EXCEPT:

a. surface impoundments

b. deep well injections

c. closed landfills

d. storm drains

d. storm drains

11

What data will insurance underwriters and technical experts analyze before underwriting a pollution legal liability policy?

They will review environmental impact statements that evaluated the geographical location of the insured site and its potential to affect surrounding locations;

the quantity of hazardous material stored or used in process on the insured site;

and the physical control measures, such as secondary containment, used on the property.

12

Loss control surveys are often used:

a. to justify leadership change

b. to identify environmental hazards

c. as an argument against liability

d. as grounds for foreclosing a property

b. to identify environmental hazards

13

The following are all environmental hazards that are commonly found in commercial buildings EXCEPT:

a. building materials that contain asbestos

b. lead paint

c. residual materials from decomposing plastic and oil

d. contaminants brought in by outside air trapped in the building

c. residual materials from decomposing plastic and oil

14

With an occurrence policy, a claim:

a. must be reported while the policy is active or occurring.

b. must be reported within two years of the claimant being exposed to the pollutant.

c. can be reported any time after the policy term, so long as the event occurred during the term

d. can be reported for a preexisting condition so long as the claim is made during the policy term

c. can be reported any time after the policy term, so long as the event occurred during the term

15

Which type of insurance can be purchased to cover potential liability for the asbestos operations and maintenance program?

asbestos-in-place insurance

16

Property owners using third-party vendors to transport hazardous materials could obtain coverage for all of the following EXCEPT:

a. bodily injury caused by the transport of hazardous materials on an airplane.

b. cleanup costs related to improperly stored materials before they are delivered to a railway station

c. property damage caused by a truck driver transporting hazardous material to a dump.

d. cleanup costs related to a pollution released from a the cargo hold of a boat.

a. bodily injury caused by the transport of hazardous materials on an airplane.

17

Steven is now the insured property owner of a downtown location. After the inception of his policy, Steven discovers a discharge of solvents being released from an on-site dry cleaning operation. Which type of insurance is most likely to cover this situation?

a. short-term chemical exposure liability insurance

b. directors' liability insurance

c. environmental liability insurance

d. pollution legal liability insurance

d. pollution legal liability insurance

18

If, in the course of landscaping a piece of property, a developer discovers several drums labeled as hazardous waste, will the pollution legal liability insurance cover this occurrence?

Yes

-claims from on-site cleanup of unknown preexisting conditions triggered by discovery or a third-party claim

19

What is cost overrun insurance?

It is stop-loss insurance that limits the financial loss exposures of environmental remediation projects for owners who are cleaning up non-operational assets, investors purchasing contaminated properties, and those who have been identified as potentially responsible parties.

20

Cleanup cost cap and remediation stop loss are alternative titles for which type of insurance?

a. cost overrun insurance

b. owner-controlled environmental insurance programs

c. contractor's pollution legal liability insurance

d. professional cost liability insurance

a. cost overrun insurance

21

Kristina owns a property with asbestos on it. She has decided to leave it in place under an approved operations and maintenance program. Additionally, she is covered by:

a. asbestos abatement liability insurance

b. environmental hazards liability insurance

c. asbestos-in-place insurance

d. stationary asbestos liability insurance

c. asbestos-in-place insurance