THE UNCERTAINTY OF ENVIRONMENTAL RISKS IN A MORE ENVIRONMENTALLY SENSITIVE WORLD

Agenda Environmental Sensitivities & Current Regulatory Climate Exposures and Considerations “War Stories”/New Contaminants Environmental Insurance, Coverage & Enhancements Open Discussion & Questions Anthony WagarMike Giese Willis Environmental PracticeChartis Environmental

Environmental Sensitivity & Current Regulatory Climate  Deepwater Horizon Oil Blowout in the Gulf of Mexico, Toxic sludge in Hungary and natural disasters in Japan.  Rising environmental protection initiatives, more stringent regulations, increasing enforcement and our clients growth and strategic expansion into new countries.  Environmental hazards are estimated to be present at 20-50% of all industrial real estate properties.

Exposures & Considerations Environmental Risks Can: ■Create direct liability ■Result in costly litigation, negatively impact the bottom line and distort revenue projections ■Cause project delays What Role Can Insurance Play? ■Transfer Risk ■Manage financial downside due to environmental issues

Exposures & Considerations Considerations  Pre-existing Site Conditions (Unknown Historical/Legacy Issues)  Operational Risk/“New” Conditions  Legal Defense, Third-Party Bodily Injury Property Damages and Cleanup Costs While not high in frequency, environmental claims can be severe. Increased public awareness about pollution conditions and resulting lawsuits for 3rd party property damage & bodily injury. Also, consider the litigation climate of the area where work is being performed

War Stories/New Contaminants  Silt/Sedimentation/Turbidity Claims “It’s just muddy water right?”  Vapor Intrusion “Is it me or does something smell in here?”  Mold/Legionella/IAQ “Just hit it with bleach!”  Green Building “It’s not easy being Green”

War Stories/New Contaminants  Asbestos “It’s not friable – it’s just loose”  Legal Defense “I didn’t do anything wrong… it’s costing me how much?”  Chinese Drywall “Why can’t you just use a good primer and paint over it?”  Env Damage/Cleanup “I have to clean up how much of it?”

Environmental Insurance, Coverage & Enhancements  Contractor’s Pollution Liability  Pollution Legal Liability

Things to Consider  Subcontractor CPL Limits – aggregate or per-project? Coverages? In force?  Cost impact of individual policies to project  Claim situation – which carrier pays?  Project CPL – the upside Eliminates erosion of GC CPL Claims resolution Know what coverage is there Avoid the uninsured indemnity

Top 6 CPL Coverage Enhancements Defense outside limits PLL coverage for owned sites  Offices  Yards/warehouses  Maintenance shops  Financial assurance for UST’s Occurrence mold coverage Blanket NODS No EFIS exclusions Broaden definition of pollution conditions  Legionella  Mold  EMF  Low Level Nuclear

THANK YOU! Open Discussion & Questions