ENVIRONMENTAL INSURANCE
BY : MARC LEBRUN , VICE PRESIDENT OF CONSTRUCTION AND ENVIRONMENTAL INSURANCE , ENCON GROUP INC .
Environmental Insurance :
How To Remain Calm In A Crisis
Would your organization be ready to respond to a crisis involving an escape of pollutants at or from your premises ? Have you considered what impact those critical decisions would have on your business and reputation ?
Often , crisis response becomes top-ofmind only after something bad happens and not before , when clearer thinking and preparation can be done . A crisis is a highstress environment where quick actions may be required . You want to be confident you will respond in a way that will protect both your business and your reputation .
Having a good crisis communications plan is an important first step to ensure your company is prepared when an environmental incident occurs . This involves creating a strategy to identify what the organization will communicate to stakeholders , including when and how the communication will be released . When a crisis strikes , the organization should be ready to do the following :
1 . Assess the situation quickly and determine how to respond .
2 . Demonstrate transparency by communicating details of the crisis , how it ’ s being managed , and include information related to safety , responsibilities , and actions moving forward .
3 . Control the narrative to prevent the spread of inaccurate information .
4 . Provide great leadership .
These tasks can appear daunting ; however , there are firms that specialize in crisis management . They can provide professional services to help you through the process of creating a crisis communications plan and , should the need arise , assist in its execution .
Responding to an accidental escape of pollutants can be a costly undertaking . While most environmental liability insurance products will cover the cost of cleanup and remediation , it ’ s also important to have coverage for crisis management , which could include expenses for public relations services . A crisis that is managed poorly can result in serious damage to an organization ’ s reputation and sales . If public confidence in the organization is diminished severely enough , it may even threaten the organization ’ s ability to continue operations .
Crisis management expense coverage can be added by endorsement to existing environmental cleanup and liability insurance policies for a wide variety of organizations , including retail , manufacturing , commercial , industrial , or institutional occupancies . The endorsement should cover reasonable and necessary fees , costs , and expenses when a pollution condition results in regional or national media reports that diminish public confidence in the named insured . Here are some examples of the types of risk that could generate a costly communications crisis if not managed correctly :
1 . A trailer storing barrels of oil at a manufacturing facility flips over when a support leg fails , resulting in a release of oil from the damaged barrels .
2 . A piece of machinery is moved from a manufacturing plant ’ s shop floor as part of a process line reorganization . A leak of hydraulic fluid is discovered emanating from the equipment and into an unsealed trench pit .
3 . A manufacturer of industrial cleaning compounds experiences an accidental discharge of approximately 16,000 liters of diluted residual material from an on-site blending tank into a storm sewer and neighbouring river . +
Marc LeBrun is Vice President of Construction and Environmental Insurance at ENCON Group Inc ., a managing general agent with over fifty years of experience in specialty insurance , including professional liability , commercial general liability , construction , and environmental . For more information , please visit encon . ca .
30 | SPRING 2017