UNLOCKING THE REAL BENEFITS OF ENVIRONMENTAL INSURANCE FOR LRAs AND DEVELOPERS Presenters: Barry Steinberg / Kutak Rock Bob Hallenbeck / XL Group – Environmental ADC NATIONAL SUMMIT WASHINGTON, DC JUNE 5, 2014

I. What should insurance do for your organization? Control liability Limit exposures Protect financial stability Provide risk management tools Help you avoid catastrophic losses Protect Directors and Officers

II. Who can you protect? The LRA itself The LRA board LRA employees Tenants Vendors Contractors Passers-by Adjacent property owners

III. Which insurance policies should be considered, and what do they cover? Property – your site and what’s on it that you own or lease General Liability – what happens on your site Workers Comp – what happens to workers on the site Auto – vehicles you own and their drivers Directors & Officers – actions taken by your Board of Directors Errors and Omissions – actions taken by professional staff and outside consultants

IV. Are there any other insurance policies you should know about and do you require them to be obtained? Tenants Contractors Subcontractors Vendors Architects Engineers Consultants Environmental Risk – CGL Exclusion

V. What kind of environmental risk will I encounter? Known conditions Unknown conditions Breach of Land use restrictions Level of cleanup needed Government continuing obligations Government right of access Adjacent property migration – to and from

VI. How can I mitigate environmental risk? Review of government documents – ECP – Regulator concerns Due diligence – Inadequacy of the CERCLA requirement – No intrusive testing – Petroleum is not a CERCLA hazardous substance – Obtain your own database Insurance

VII. Evolving environmental risk considerations for former military installations Leases – no CERCLA warranty MEC-Army / EPA dispute concerning CERCLA applicability Vapor intrusion Pesticides

VIII. Government continuing obligations CERCLA warranty – when does the government respond? 330 – the OSD effort to limit it

IX. So what does environmental insurance protect against? Unknown and new conditions that are not the government’s responsibility Remediation 3 rd party bodily injury and property damage Legal defense costs Regulatory reopeners Business interruption and other enhancements

X. What does it not protect? Known conditions that are the government’s responsibility New and unknown conditions that are the government’s responsibility Ongoing government remediation and demolition The government being added as an additional insured

XI. Who does it protect? The LRA (Camp Bonneville) The LRA Board (Roosevelt Roads) Tenants (Riverbank) Developers (Lowry) Municipalities and communities (Ft Ord)