Contractors Pollution Liability Insurance Policy
Occurrence-Based
Liability Coverage
This Policy is issued by the
stock insurance company identified in the Declarations (hereinafter the
Insurer).
THIS POLICY
PROVIDES FIRST-PARTY COVERAGE
ON A DISCOVERED
AND REPORTED BASIS,
WHICH
COVERS ONLY
POLLUTION CONDITIONS AND SITE ENVIRONMENTAL CONDITIONS, AS APPLICABLE, FIRST
DISCOVERED
AND FOR WHICH AN EMERGENCY CLAIM IS REPORTED TO THE INSURER, IN WRITING, DURING
THE POLICY
PERIOD OR WITHIN THIRTY DAYS THEREAFTER. THIS POLICY ALSO PROVIDES COVERAGE FOR
EMERGENCY
RESPONSE COSTS THAT IS LIMITED BY MORE SPECIFIC REPORTING CRITERIA AND COVERS
ONLY
EMERGENCY RESPONSE COSTS INCURRED, AND REPORTED TO THE INSURER, IN WRITING,
WITHIN
THE
SPECIFIC TIMING REQUIREMENTS IDENTIFIED IN THIS POLICY. PLEASE READ THIS POLICY
CAREFULLY.
SOME OF THE
PROVISIONS CONTAINED IN THIS POLICY RESTRICT COVERAGE, SPECIFY WHAT IS AND IS
NOT COVERED
AND DESIGNATE YOUR RIGHTS AND DUTIES.
LEGAL DEFENSE EXPENSES ARE SUBJECT TO
AND SHALL ERODE THE LIMITS OF
LIABILITY AND ANY APPLICABLE SELF-INSURED RETENTION.
Throughout this Policy the words the Insurer shall refer to the company providing this insurance. Other words and phrases
that appear in quotation marks have special meanings and are defined in Section
V., DEFINITIONS.
In consideration of the payment of the premium and in reliance upon all
statements made in the Application to this Policy, including
the information furnished in connection therewith, and subject to all terms,
definitions, conditions, exclusions and limitations of this Policy, the
Insurer agrees to provide insurance coverage to the “insured” as described herein.
I. INSURING AGREEMENTS
Solely to the extent that the coverages below are identified on the
Declarations to this Policy as being underwritten by the Insurer, the Insurer agrees to pay on behalf
of the “insured” for:
A. CONTRACTORS
LIABILITY COVERAGE (Coverage A.)
“Loss”, in excess of the “self-insured retention”, resulting from “claims” arising out of a “pollution condition” or “site environmental condition”.
The coverage afforded pursuant to this Coverage A. only applies when the “bodily injury”, “property damage” or “environmental damage” associated with such “loss” occur during the “policy period” and result from
“covered operations”, “completed operations” or “transportation”.
B. CONTRACTORS
EMERGENCY RESPONSE AND CATASTROPHE MANAGEMENT COVERAGE (Coverage B.)
“Loss”, in excess of the “self-insured retention”, resulting from
“emergency claims” arising out of a “pollution condition” or “site
environmental condition”, provided
the “insured” first
discovers such “pollution
condition” or
“site environmental condition” during the “policy period”. Any such “emergency claim” must be reported to
the Insurer, in writing, during the “policy period” or within
thirty (30) days after the expiration of the “policy period”.
The coverage afforded pursuant to this Coverage B. only applies to “pollution conditions” and “site
environmental conditions” that result from “covered operations” or “transportation” performed during the “policy period”, including associated “completed operations”, if any.
II. LIMITS OF LIABILITY AND SELF-INSURED RETENTION
A. It is expressly agreed that the Insurer’s obligation to pay for any covered “loss” pursuant to this Policy
shall attach to
the Insurer only after the “first named insured” has paid, or has provided evidence to the Insurer that another “named
insured” has paid, the full amount of the “self-insured retention” with respect to any covered “pollution condition” or
“site environmental condition”. Under no
circumstances, including, but not limited to, an “insured’s” insolvency
and/or bankruptcy, shall the Insurer be liable to pay any amount within the “self-insured retention”. In the event that the “first named insured” cannot provide satisfactory evidence that a “named insured” has paid the full amount of the “self-
insured retention” with
respect to any covered “pollution condition” or “site
environmental condition”, the “first named insured” shall remain responsible to pay the “self-insured retention” before the Insurer’s payment obligation pursuant to this Policy shall attach
with respect to coverage sought by any “insured”.
Notwithstanding the foregoing, if the “insured” agrees with the Insurer to use “mediation” to successfully resolve any
“claim” for which “legal defense expenses” have been incurred, then the “self-insured retention” applicable to the
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“pollution
condition”
or
“site environmental
condition”
that
corresponds to
such
“claim”
shall be
reduced
by
fifty percent (50%), subject to a maximum reduction in the “self-insured retention” of
twenty-five thousand dollars ($25,000).
B. One
“self-insured retention” shall apply to all “loss” arising out of
the same, continuous, repeated, or related “pollution
condition” or “site environmental condition”. If the same, continuous, repeated, or related “pollution condition” or “site
environmental condition” triggers coverage pursuant to multiple coverage parts,
or otherwise involves multiple
exposures that have been assigned
exposure-specific “self-insured retention” amounts by endorsement to this Policy,
the single largest of the associated “self-insured retention” amounts identified in: 1) Item 4.a. of the Declarations; 2)
any Supplemental Coverage added by
endorsement to this Policy; or 3) any
exposure-specific “self-insured retention”
endorsement identified as part of this
Policy, shall apply to all “loss”
and other covered exposures arising out of such
“pollution condition” or “site
environmental condition”,
except for any “catastrophe management costs” that are
assigned an exposure-specific “self-insured retention” in Item
4.b. of the Declarations, if any (hereinafter Catastrophe
Management-Specific SIR Obligation). Amounts within any such Catastrophe
Management-Specific SIR Obligation
shall be independent of, and shall not
otherwise erode, the single largest “self-insured retention” applicable to all other
covered exposures arising out of the same “pollution condition” or “site
environmental condition” as
contemplated
herein.
C. Subject to
Subsections D. and E., below,
the most the Insurer shall pay for all “loss” arising out of
the same,
continuous,
repeated, or related “pollution condition” or “site environmental condition” is the Per
Pollution Condition or Site
Environmental Condition Limit of Liability identified in Item 3.a. of the Declarations to this Policy.
D. Subject to
Subsection C., above, and Subsection E., below, $250,000 shall be the maximum amount
the Insurer
shall pay for all “catastrophe management costs” arising out of all “pollution conditions” and “site
environmental conditions”.
E. Subject to
Subsections C. and D., above, the Total Policy and Program Aggregate Limit of Liability
identified in Item
3.b. of the Declarations shall be the maximum liability of the Insurer
pursuant to this Policy with respect to all “loss”.
F. All “loss” arising
out of the same, continuous,
repeated or
related “pollution condition” or “site environmental condition”
shall be
treated as arising out of a single “pollution condition” or “site
environmental condition” subject to a single Limit
of Liability pursuant to a single policy. If the Insurer or an affiliate has issued
occurrence-based contractors
pollution liability coverage
to the “insured”
over successive policy periods, said “loss” shall be subject to the Limits
of Liability and
“self-insured retention” of the policy in effect at the time that
the associated “bodily injury”, “property
damage” or “environmental damage” first occur from
such “pollution condition” or “site
environmental condition”.
G. Indivisible,
progressive “bodily injury”, “property damage” or
“environmental damage”
over multiple policy periods
caused by the same,
continuous, repeated or related “pollution condition” or “site environmental condition”
shall be deemed to have occurred only in the policy period of the date of the first exposure to the “pollution condition” or “site
environmental condition”. If the Insurer or an affiliate has issued
occurrence-based contractors pollution liability coverage to the “insured” over
successive policy periods, and, if the date of such first exposure cannot be conclusively determined, but the indivisible, progressive
“bodily injury”,
“property damage”
or “environmental damage” continues to exist during the Insurer’s successive
periods of coverage,
the “bodily injury”,
“property damage” or “environmental damage” shall be deemed to have occurred only on the effective date of the first, relevant contractors pollution
policy issued by the Insurer.
H. If the
Insurer or an affiliate has issued emergency response or catastrophe management
coverage on a
discovered and reported basis consistent with coverage afforded pursuant
to this Policy in one or more policy periods,
and a
“pollution condition”
or “site
environmental condition” is first discovered and reported to the Insurer in accordance with the terms and conditions of this
Policy, then any continuous, repeated, or related “pollution condition” or “site environmental condition” that is subsequently
reported to the Insurer during later policy periods shall be deemed to be one
“pollution condition” or “site
environmental condition” discovered
during this “policy
period”, and no other policy shall respond.
III. DEFENSE AND SETTLEMENT
A. The Insurer shall have the right
and, subject to the “self-insured retention” obligation, the
duty to defend the
“insured” against a “claim” to which this
insurance applies. The Insurer shall have no duty to
defend the “insured”
against any
“claim” to
which this insurance does not apply. The Insurer’s duty to
defend the “insured“ ends once the Limits of Liability are
exhausted or are tendered
into a court
of applicable
jurisdiction, or once the “insured” refuses a settlement offer
as provided in Subsection E.,
below.
B. The Insurer shall have the right
to select legal counsel to: 1) represent the
“insured” for the
investigation,
adjustment, and defense of any “claims” covered
pursuant to this Policy; and 2) assist the “insured” with
clarifying
the extent of, and to help minimize, any “emergency response costs”.
Selection of legal counsel by the Insurer shall not be done without the consent
of the “insured”; such consent shall not be unreasonably withheld.
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In the
event
the
“insured”
is
entitled
by
law to
select independent counsel
to
defend
itself
at the
Insurer's
expense,
the attorney fees and all other litigation
expenses the Insurer shall pay to that counsel are limited to the rates the
Insurer actually pays to counsel that the
Insurer normally retains in the ordinary course of business when
defending “claims” or lawsuits of similar complexity in the jurisdiction
where the “claim” arose or
is being
defended.
In addition, the “insured” and the Insurer agree that the Insurer may exercise the right to require that
such counsel: 1) have certain minimum qualifications with respect to their competency,
including experience in
defending “claims” similar to those being asserted against the “insured”; 2)
maintain suitable errors and omissions
insurance coverage; 3) be located within a reasonable proximity to the jurisdiction of the “claim”;
and 4) agree in
writing to respond in a timely manner to the Insurer’s requests for
information regarding the “claim”. The “insured”
may
at any time, by its signed consent, freely and fully waive its right to select
independent counsel.
C. The “insured” shall
have the right
and the duty to
retain a qualified environmental consultant or “catastrophe
management firm” to: 1) perform any investigation and/or remediation
of any “pollution condition” or “site environmental
condition” covered pursuant to this Policy; or 2) perform “catastrophe management
services” covered pursuant to this Policy,
respectively. The “insured” must receive the consent of the Insurer prior to the selection and retention of any such
environmental consultant or “catastrophe management
firm”, except
in the event of an “emergency claim” that results in “emergency response costs”.
D. “Legal defense
expenses” reduce the
Limits of Liability identified in the Declarations to this Policy, and, unless
specifically stated otherwise herein, any applicable Limits or Sublimits
of Liability identified in any endorsement hereto. “Legal defense expenses” shall also be applied to the “self-insured retention”.
E. The Insurer
shall present all settlement offers to the “insured”. If the
Insurer recommends a settlement which is
acceptable
to a claimant, exceeds any applicable “self-insured retention”, is within the
Limits of Liability, and does
not impose any additional unreasonable
burdens on the “insured”,
and the “insured” refuses to consent
to such
settlement offer, then the Insurer’s duty to
defend shall end. Thereafter, the “insured” shall defend
such “claim”
independently and at the “insured’s” own
expense. The Insurer’s liability shall not
exceed the amount
for which
the “claim” could have been
settled if the Insurer’s recommendation
had been accepted, exclusive of the “self-
insured retention”.
IV. COVERAGE TERRITORY
The coverage afforded pursuant to this Policy shall only apply to
“covered operations” and “transportation” performed,
and “claims” made,
within the United States of America.
V. DEFINITIONS
A. “Additional insured” means:
1. Any person or entity specifically endorsed onto this Policy as an “additional insured”, if any. Such “additional
insured” shall maintain only those rights that are specified by endorsement to this Policy; and
2. All clients, or other persons or
entities, which a “named insured” is required by written contract or agreement
with its client to
secure such coverage, but solely with
respect to “covered operations”, “completed operations”
or “transportation” performed for that client (hereinafter Client Additional
Insureds). Such Client Additional Insureds are covered solely with respect to their
vicarious liability for a monetary judgment, award or settlement of
compensatory damages to which this insurance applies.
B. “Adverse media coverage” means
national or regional news exposure in television, radio, print or internet
media that is reasonably likely to have a negative impact on the “insured” with
respect to its income,
reputation, community relations, public confidence or good will.
C. “Bodily injury” means
physical injury, illness, disease, mental anguish, emotional distress, or
shock, sustained by
any person, including death
resulting therefrom, and any prospective medical monitoring costs that are
intended to confirm any such physical
injury, illness or disease.
D. “Catastrophe management costs” means
reasonable and necessary expenses approved by the Insurer, in
writing, except for those expenses incurred during the same seven (7) day
period associated with “emergency response costs”, which have
been incurred by the “insured” for the following:
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1.
Responsive consulting services rendered by
a “catastrophe management
firm”;
2. Printing, advertising, mailing of materials
of public relations materials;
3. Travel by directors,
officers, employees or agents of the “insured”, or the “catastrophe management firm”,
incurred at the direction of a
“catastrophe management firm”;
4. To secure the scene of a “pollution
condition” or “site environmental condition”; or
5. Sums advanced to third-parties
directly harmed by the “pollution condition” or “site environmental condition”
for their medical costs; funeral costs; psychological counseling; travel expense costs; temporary living costs
or
other necessary response costs,
but solely in those instances when, in the
good faith opinion of a “key executive”, the associated “pollution condition”
or “site environmental condition” has resulted in or is reasonably likely to
result in: a) “loss”
(exclusive of “catastrophe management
costs”) that
will exceed the applicable “self-insured retention”;
and b) a need for “catastrophe management services”
due to “adverse media coverage”.
“Catastrophe management costs” do not include any “legal defense expense”.
E. “Catastrophe management firm” means any firm
that is approved, in writing, except for firms retained for the
same seven (7)
day period associated with “emergency response costs”, by the Insurer to perform “catastrophe management services” in
connection with a “pollution condition” or
“site environmental condition”.
F. “Catastrophe management services” means advising the “insured” with
respect to minimizing potential harm to
the “insured” from a
covered “pollution
condition” or “site
environmental condition” by
managing “adverse
media coverage” and maintaining and
restoring public confidence in the “insured”, and its services
or products.
G. “Claim” means
the written assertion of a legal right received by the
“insured” from a
third-party, or from another
“insured” that is party to an “environmental indemnity obligation”,
including, but not limited to, a “government action”,
suits or other actions alleging
responsibility or liability on the part of the “insured” for “bodily
injury”, “property
damage”
or “remediation costs” arising out of “pollution conditions” or “site environmental conditions” to which this insurance
applies.
H. “Completed operations” means “covered operations” that have been completed. “Covered operations” shall be
deemed completed at the earliest of the following times:
1. When all the “covered operations” called for within a particular contract have been completed during the “policy
period”;
2. When that part of the “covered operations” called for within a particular contract has been put to its intended use
by any person or organization other than another contractor or
subcontractor working on the same project.
“Covered operations” that may need service, maintenance, correction, repair or
replacement, but which are otherwise
completed, shall be deemed completed. “Covered operations” that have been abandoned shall be treated as not yet
completed.
I. “Covered operations” means those operations specifically identified in Item 6. of the Declarations that are
performed at a “work site” by or on behalf of a “named insured”, including project management and site supervision duties, along with any attendant coordination,
facilitation or effectuation of the disposal and/or recycling of waste materials generated from
such operations at a “non-owned disposal site”.
J. “Emergency claim” means the
first-party discovery of a “pollution condition” or a “site environmental condition”
during the “policy period” by an “insured” to which this insurance applies.
K. “Emergency response costs” means reasonable and necessary “remediation costs” incurred within seven
(7) days
following the
discovery of a “pollution condition” or “site environmental condition” by a “responsible person” in
order to
abate or respond to an imminent and
substantial threat to human health or the environment arising out of a
“pollution
condition” or “site environmental condition” resulting
from “covered operations”, “completed operations” or
“transportation”, provided such
“emergency response costs”
are reported to the Insurer within fourteen (14) days
of when that “responsible person” first
became aware of such “pollution condition” or “site environmental
condition”. If no applicable laws exist that govern the
remediation of such “pollution condition” or “site environmental
condition” in the
jurisdiction of the “covered
operations”, “completed operations” or “transportation”,
necessary
"remediation costs" may be established by securing the written professional recommendations of an “environmental
professional”.
“Emergency response costs” also
means reasonable and necessary expenses required to restore, repair or
replace real or personal property to
substantially the same condition it was in prior to being damaged during the
course of responding to such “pollution condition” or “site environmental condition”. Such expenses shall not include
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costs
associated with betterments or improvements, except to the extent that such
betterments or improvements are exclusively
associated with the use of building materials which are environmentally
sustainable. Any such environmentally sustainable material must be: a) certified as such by an applicable independent certifying institution where such certification is available; or b) in the absence of any such certification, based solely on the judgment
of the Insurer and at its sole discretion.
L. “Environmental damage” means physical damage to buildings or structures, land,
the atmosphere, surface water,
groundwater, or sediment arising out of a “pollution condition” or “site
environmental condition” that
results in “remediation costs”.
“Environmental damage” does not mean “property damage”.
M. “Environmental indemnity obligation” means
that part of any written contract or agreement wherein a “named
insured” assumes the vicarious
liability of a Client Additional Insured or third-party to pay for a monetary
judgment,
award or settlement of compensatory damages
resulting from “covered operations” to which this insurance applies.
N. “Environmental professional" means a
licensed professional that is:
1. Mutually agreed upon by the
Insurer and the “insured”,
except with respect to “emergency response costs”; and
2. Qualified
by licensure, knowledge,
skill, education and
training to perform
an assessment, prepare
an
investigation protocol, interpret the results and prepare a scope of work to remediate a “pollution condition” or
“site environmental condition”.
O. “First named insured” means the person or entity as identified in Item 1. of the Declarations to this Policy.
The “first
named insured” is the party responsible for the payment of any premiums and the payment of, or
evidencing payment
of, any applicable “self-insured retention” amounts. The “first named insured” shall also serve as the sole agent on
behalf of all “insureds” with respect to the provision and receipt of notices, including notice of
cancellation or non-
renewal, receipt and acceptance of any endorsements or any other
changes to this Policy, return of any premium,
assignment of any interest pursuant to this
Policy, unless any such responsibilities are otherwise designated by
endorsement.
P. “Fungi” means any type
or form of fungus, including mold or mildew, and any mycotoxins, spores,
scents, or
byproducts produced or released by “fungi”.
Q. “Government action” means
action taken or liability imposed by any Federal, state, commonwealth,
municipal or
other local government agency or body acting pursuant to
the authority of applicable law.
R. “Illicit abandonment” means
the intentional placement or abandonment of any waste or materials beyond the
boundaries of a “work site” or “non-owned disposal site” during “transportation” by a person or entity that:
1. Is not an “insured”; and
2. Is not affiliated by common ownership with an “insured”.
“Illicit abandonment” does
not mean any such placement or abandonment, above, which takes place, in whole
or in part, prior to the inception date identified in Item 2. of the Declarations of this Policy.
S. “Insured” means the
“first named insured”, any ”named insured”, any “additional insured”, and:
1. Any past or present director or
officer of, partner in, employee of, or, with respect to a limited liability
company, a
member of, any of the foregoing while acting within the scope of his or
her duties as such;
2. The heirs,
executors, administrators, and legal representatives of each “insured”, as
defined in Paragraph 1.,
above, in the event of death, incapacity or bankruptcy,
but only with
respect to liability arising out of “covered operations” rendered
on behalf of a “named insured”
prior to death, incapacity or bankruptcy;
3. Any person who is a temporary or leased
worker performing “covered operations” on
behalf of, and pursuant to
the
supervision of, an “insured”; and
4. A joint venture
to which a “named insured” is a party, but only to the
extent the joint venture’s legal liability
arises out of the
“named insured’s” performance of “covered operations” pursuant to any such
joint venture.
T. “Key executive” means the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
General Counsel,
general partner or managing partner (if the “insured” is a partnership), managing member (if the “insured” is a limited liability company) or sole
proprietor (if the “insured”
is a sole proprietorship)
of the “insured”.
A “key executive” also means any other person holding a title designated by the “first
named insured”,
approved by the Insurer, and identified by endorsement to this Policy.
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U. “Legal defense expense” means
reasonable legal costs, charges, and expenses, including expert charges,
incurred
by the “insured”:
1. In the investigation, adjustment
or defense of
“claims”; or
2. In order to clarify the extent of, minimize,
and effect resolution of, any obligation to incur “emergency response
costs”.
V. “Loss” means:
Coverage A.
1. A monetary judgment, award or
settlement of compensatory damages arising from “bodily injury”, “property
damage” or “remediation costs”, including associated punitive, exemplary or
multiplied damages, and civil fines,
penalties and assessments, but solely to the extent that the punitive,
exemplary or multiplied damages, and civil fines, penalties and assessments:
a. Are insurable under applicable
law; and
b. Arise out of a “pollution condition” or “site
environmental condition” that results in “bodily injury”,
“property
damage” or “remediation costs” to which this insurance otherwise applies; and
2. Associated “legal defense
expense”.
Coverage B.
3. “Emergency response costs”;
4. “Catastrophe management costs”; and
5. Associated “legal defense expense”.
Supplemental Coverages
6. Any other
liability or first-party exposure insured pursuant to any Supplemental Coverage
added by endorsement
to this Policy.
W. “Low-level radioactive waste” means
waste:
1. Defined as such in Title 10 Code of Federal
Regulations Part 61.2;
2. Classified as Class A , B or C
waste in accordance with Title 10 Code of Federal Regulations Part 61.55; and
3. Regulated by the United States
Nuclear Regulatory Commission (NRC) or a NRC Agreement State pursuant
to a Type A, B or C Specific License of Broad Scope in accordance with
Title 10 Code of Federal Regulations
Part
33.11.
X. “Mediation” means a
conciliatory, non-binding attempt to resolve a “claim” using a neutral, third-party facilitator.
Y. “Mixed waste” means
a waste that contains both “low-level radioactive
waste” and hazardous waste regulated by
the Resource
Conservation and Recovery Act and defined as hazardous in accordance with Title
40 Code of Federal Regulations Part 261.3.
Z. “Named insured” means the “first named insured” and any other person or entity specifically endorsed onto
this
Policy as a “named
insured”, if any. “Named insureds” shall maintain the same rights
pursuant to this Policy as the
“first named insured”, except for those
rights specifically: 1) reserved to
the “first named insured” as defined herein; or
2) limited by endorsement to this Policy.
AA. “Natural resource damage” means injury to, destruction of, or loss of,
including the resulting loss of value of, fish,
wildlife, biota, land, air, water, groundwater, drinking water supplies,
and other such resources belonging to, managed
by, held in trust by, appertaining to, or otherwise controlled by the
United States of America (including the resources of the fishery conservation
zone established by the Magnuson-Stevens Fishery Conservation and Management
Act (16 U.S.C. § 1801 et. seq.)), any state,
commonwealth or local government, or any Native American Tribe, or, if such resources
are subject to a trust restriction on alienation, any members of any Native
American Tribe, including the reasonable
costs of assessing such injury, destruction or loss resulting therefrom.
BB.“Non-owned disposal site” means:
1. Any treatment, storage, transfer, disposal or
recycling site or facility located within the United States of America
that has not at any time been owned or operated, in whole or in part, by any “insured”, which receives, or has
historically received, a waste resulting from “covered operations”;
provided that such treatment, storage, transfer, disposal or recycling site or facility:
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a.
Was properly permitted and licensed to accept
the wastes at the time of such disposal by the Federal,
state, commonwealth,
municipal or other local government agencies or bodies with applicable
jurisdiction;
b. Was not owned or operated by any
person, corporation or unincorporated association that was in
bankruptcy at the time
the waste was received for disposal; and
c. Has not, prior to the time the
waste was received for disposal, been identified on the United States EPA
(CERCLA) National Priorities List or pursuant to any functional
equivalent of that list made by Federal,
state,
commonwealth, municipal or other local government agency or body with
applicable jurisdiction, or
2. Any treatment, storage,
transfer, disposal or recycling site or facility specifically identified on a
Schedule of Non-
Owned Disposal Sites Endorsement attached to this Policy, if any.
CC.“Policy period” means the
period of time specifically identified in Item 2. of the Declarations to this Policy,
or any
shorter period of time resulting from the cancellation of this Policy.
DD. “Pollution condition” means:
1. “Illicit abandonment”; or
2. The discharge, dispersal,
release, escape, migration, or seepage of any solid, liquid, gaseous or thermal
irritant,
contaminant, or pollutant, including soil, silt, sedimentation, smoke,
soot, vapors, fumes, acids, alkalis, chemicals,
electromagnetic fields
(EMFs), hazardous substances,
hazardous materials, waste materials, “low-level radioactive waste”, “mixed waste” and medical, infectious or pathological wastes, on,
in, into, or upon land and structures
thereupon, the atmosphere, surface water, or groundwater.
EE. “Property damage” means:
1. Physical injury to, or
destruction of, tangible property of a third-party, including all resulting
loss of use of that
property;
2. Loss of use of tangible property
of a third-party, that is not physically injured or destroyed;
3. Diminished value of tangible
property owned by a third-party; or
4. “Natural resource damages”.
“Property damage” does not mean
“remediation costs” or “environmental damage”.
FF. “Remediation costs” means
expenses incurred to investigate, quantify, monitor, remove, dispose, treat,
neutralize,
or immobilize “pollution conditions”
or “site
environmental conditions” to the
extent required by applicable law in the
jurisdiction of such “pollution conditions” or “site
environmental conditions”.
GG.“Responsible person” means any employee of an “insured” responsible for
environmental affairs, control, or
compliance of “covered operations” or
“transportation”, or any “key executive” of, officer or
director of, or partner in, an
“insured”.
HH.“Self-insured retention” means
the largest applicable dollar amount among triggered coverage parts identified
in
Item 4. of the Declarations to this Policy, or as
otherwise designated by endorsement to this Policy, if any.
II. “Site environmental condition” means:
1. The presence of “fungi” at a “work site”;
or
2. The discharge, dispersal, release, escape,
migration or seepage of legionella pneumophila at a “work site”,
provided that such “fungi” or legionella pneumophila are not naturally occurring in the environment in the
amounts and concentrations found at the “work site”.
JJ. “Terrorism” means
activities against persons, organizations or property of any nature:
1. That involve the following or
preparation for the following:
a. Use or threat of force or
violence; or
b. Commission or threat of a
dangerous act; or
c. Commission or threat of an act that
interferes with or disrupts an electronic, communication, information, or
mechanical system; and
2. When one or both of the
following applies:
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a.
The effect is to intimidate or coerce a
government or the civilian population or any segment thereof, or to
disrupt any segment of the economy; or
b. It appears that the intent is
to intimidate or coerce a government, or to further political, ideological,
religious,
social or economic objectives or to express (or express opposition to)
a philosophy or ideology.
KK.“Transportation” means
the movement of waste derived from “covered operations” or materials reasonably related
to “covered operations” by automobile, aircraft, watercraft, rolling stock or
other conveyance, including any associated
loading or unloading thereof, by or on behalf of an “insured”,
provided that any such movement, and associated loading and unloading activities are:
1. Within the boundaries of a “work site”;
2. To or from a “work site”; or
3. From a “work site” to a “non-owned disposal site”.
LL. “War” means war,
whether or not declared, civil war, martial law, insurrection, revolution,
invasion, bombardment or
any use of military force, usurped power or confiscation,
nationalization or damage of property by any government,
military or other authority.
MM. “Work Site” means a location where “covered operations” are being performed, including real property rented or
leased by the “named insured” on a temporary basis for the purpose of providing “covered operations” for a client.
“Work site” does not mean:
1. A “non-owned disposal site”; or,
2. To the extent that Premises
Pollution Liability Coverage is added by endorsement to this Policy, only,
a “covered
location”.
VI. EXCLUSIONS
This insurance shall not apply to:
A. Contractual Liability
“Loss” arising
out of or related to liability of others assumed by any “insured” through
contract or agreement, except if the liability would have
attached to the “insured” in the absence of such contract or agreement.
This
exclusion shall not apply to “environmental indemnity obligations”.
B. Criminal Fines and Criminal Penalties
“Loss” arising out of or related to criminal fines, criminal
penalties or criminal assessments.
C. Employers Liability
“Loss” arising out of or related to “bodily injury” to:
1. Any “insured” or
any employee of its parent corporation, subsidiary or affiliate:
a. Arising out of, or in the course
of, employment by any “insured”, its parent corporation, subsidiary or
affiliate; or
b. Performing duties related to the
conduct of the business of any “insured”, its parent corporation,
subsidiary or
affiliate.
2. The spouse, child, parent,
brother or sister of any “insured” or employee of its parent corporation, subsidiary
or affiliate as a
consequence of Paragraph 1.,
above.
This
exclusion applies:
1. Whether any “insured” may
be liable as an employer or in any other capacity; and
2. To any obligation to share
damages with or repay someone else who must pay damages because of such
“bodily injury”.
This exclusion shall not apply to
liability assumed by a “named insured” in an “environmental
indemnity
obligation”.
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D. Insured’s Internal Expenses
“Loss” arising out of or related to expenses incurred by any “insured” for services performed by its
salaried staff and any employees.
This exclusion shall not apply to:
1. “Emergency response costs”, along with any
associated “catastrophe management costs” incurred during that
same seven (7) day
period, but solely to the extent that such costs are limited to the “insured’s” actual out-of-
pocket labor and expense costs that are not marked-up
using multipliers for fringe benefits, overhead or profit; or
2. Any other costs, charges or
expenses incurred with the prior approval of the Insurer at its sole
discretion.
E. Intentional or
Fraudulent Acts
“Loss”
arising out of or related to:
1. Any knowing, willful or
deliberate noncompliance with any statute, regulation, ordinance, municipal
code,
administrative complaint, notice
of violation, notice
letter, administrative order,
or instruction of any
governmental
agency or body; or
2. Any fraudulent, criminal, or malicious act or
those of a knowingly wrongful nature committed intentionally by or
at the direction of a
“responsible person”.
This exclusion shall not apply to any “insured” that did not personally acquiesce in or remain passive after having personal knowledge of one or more of the acts described
above.
F. Known Conditions
1. “Loss” arising out of or related to “pollution conditions” or “site environmental conditions” in existence prior to the
“policy period”, or arising out of any resumption, change or continuation of such “pollution condition” or “site
environmental condition”,
provided any “responsible person”
knew or reasonably could have
foreseen prior to the “policy period” that such “pollution conditions” or “site environmental conditions” could
give rise to “loss” to which this Policy
may apply; and
2. “Loss” arising out of or related to “pollution conditions” or
“site environmental conditions” that an “insured” has
reported to another insurer pursuant to a prior policy. This provision shall apply whether or not
the Limits of
Liability have been exhausted pursuant to such prior policy or the terms
of said prior policy are materially different from this Policy.
This exclusion shall not apply to “loss” that
directly results from the exacerbation of any such
“pollution condition” or “site
environmental condition” when such
“pollution condition” or “site environmental condition” is the subject
of “covered operations”.
G. Non-Owned Disposal Sites
“Loss” arising
out of or related to “pollution conditions” on, at, under or migrating from any treatment, storage, disposal, transfer or recycling site or facility that is
not a “non-owned disposal site”.
H. Nuclear or Radioactive Hazard
“Loss” arising out of or related to:
1. Radiation or contamination by
radioactivity from, or the radioactive, toxic, explosive, or hazardous
properties
of, nuclear fuel, nuclear
materials, nuclear waste, nuclear assembly or components thereof, radioactive
waste, including, but not limited to, high-level radioactive waste (e.g.,
spent nuclear fuel or the highly radioactive
waste produced if spent fuel is reprocessed), uranium milling residues and
waste with elevated quantities of elements heavier than uranium; or
2. Naturally occurring radioactive
materials (commonly referred to as NORM, TNORM, or TENORM), unless
such naturally occurring radioactive materials are released or dispersed
as a direct result of “covered
operations”.
This
exclusion shall not apply to “loss” arising out of “low-level
radioactive waste” or “mixed waste”.
I. Products Liability
“Loss” arising out of or related to any
goods or products manufactured, sold, or distributed by any “insured”.
This exclusion shall not apply to “claims” arising
out of the installation of building components associated with
“covered operations”.
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J. Professional Liability
“Loss” arising out of
or related to the “insured's” rendering of or failure to render professional services, including, but not limited
to, recommendations, opinions,
and strategies rendered
for architectural, consulting,
design and engineering
work, such as
drawings, designs, maps,
reports, surveys, change
orders, plan specifications, assessment work, remedy selection, site
maintenance, equipment selection, and related construction management, supervisory, inspection or engineering services.
This exclusion shall not apply to “pollution conditions” or “site environmental conditions” that arise as a result of “covered operations”.
K. Related Entities
“Loss” arising out of or related to “claims” asserted by any organization
that: 1) is or
was operated, managed, owned or
controlled, in whole or in part, by a “named insured”, or an “additional insured” affiliated
by common ownership with a “named insured”; or 2) did or does operate, manage, own or control, in whole or in part, a “named
insured”, or an “additional insured”
affiliated by common ownership with a
“named insured”.
L. Vehicles
“Loss” arising out of or
related to “pollution conditions” resulting from the use, maintenance or operation of an automobile,
aircraft, watercraft, rolling stock or other conveyance.
This
exclusion shall not apply to “pollution conditions” resulting
from “transportation”.
M. War or
Terrorism
“Loss” arising out of or related to “pollution conditions” or “site
environmental condition” attributable, whether directly or indirectly, to any acts that involve, or that involve preparation for, “war” or
“terrorism” regardless of any other
cause or event that contributes concurrently or in any sequence to the injury
or damage.
N. Workers’ Compensation
“Loss” arising out of or related to any
obligation of any “insured” pursuant to the Jones Act or any workers’ compensation,
unemployment compensation, or disability benefits law or related laws.
VII. REPORTING AND COOPERATION
A. Without
limiting the specific requirements contained in any Insuring Agreement or any
other exposure-specific
reporting requirements contained within this Policy, the “insured” shall
also see to it that the Insurer receives notice of
any “claim” or “emergency claim”, as soon as practicable, by one or more of the
following:
1. Provide written notice to the
address, fax number, or email address identified in Item 8.a. of the Declarations
to this Policy; or
2. Provide verbal or electronic
notice utilizing the Environmental Incident Alert - 24-hour Emergency
Response and Incident Reporting System by calling the telephone number identified in Item 8. of the
Declarations
to this Policy or by using the associated telephone web application,
respectively.
Such
notice should include reasonably detailed information as to:
1. The identity of the “insured”,
including contact
information for an appropriate person to contact regarding
the
handling of the “claim” or
“emergency claim”;
2. A description of the “covered operations”;
3. The nature of the “claim” or “emergency claim”; and
4. Any steps undertaken by the “insured” to respond to the “claim” or
“emergency claim”.
B. The “insured” must:
1. As soon as practicable, send the
Insurer copies of any demands, notices, summonses or legal papers
received in connection with any
“claim”;
2. Authorize the Insurer to obtain records and
other information;
3. Cooperate with the Insurer in the investigation, settlement or defense of the “claim”;
4. Assist the Insurer,
upon the Insurer’s request,
in the enforcement
of any right
against any person or
organization which may
be liable to the “insured” because of “loss” to which
this Policy may apply; and
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5.
Provide the Insurer with such information and
cooperation as it may reasonably require.
C. No “insured” shall
make or authorize an admission of liability or attempt to settle or otherwise
dispose of any
“claim”, without the written consent of the Insurer. Nor shall any “insured” retain
any consultants or “catastrophe
management firms”, or incur any “emergency response costs” or
“catastrophe management
costs” with
respect to a “emergency claim”, without the prior consent of the Insurer,
except for “emergency response costs”.
D. Upon the discovery of a
“pollution condition” or “site environmental condition”, the
“insured” shall
make every attempt
to mitigate any loss and comply with applicable law. The Insurer shall
have the right, but not the duty, to mitigate such
“pollution
conditions” or
“site environmental condition” if, in the sole judgment of the Insurer, the “insured” fails
to take reasonable steps to do so.
In that event, any “remediation costs” or
“catastrophe management costs” incurred by
the Insurer shall be deemed incurred by the
“insured”, and shall be subject to the “self-insured
retention” and
Limits of Liability identified in the Declarations to this Policy.
For the purposes of fulfilling the notice requirements contained in the
Insuring Agreements to this Policy, notice supplied pursuant to one or more of the verbal or electronic notice mechanisms
specifically contemplated in Subsection A., above, or on the Declarations shall constitute written notice to
the Insurer.
VIII.GENERAL CONDITIONS
A. Cancellation
1. This Policy
may be cancelled only by the “first named insured”, or
through the “first named insured’s” agent,
by mailing to the Insurer at the address identified in Item 8.b. of the Declarations to this Policy, written notice stating
when such cancellation shall be effective.
2. This Policy may be cancelled by the Insurer
for the following reasons:
a. Non-payment of premium;
b. Fraud or material misrepresentation on the
part of any “insured”; or
c. Material change in the “covered
operations” from the description
identified in the Application to this Policy
and supporting materials which results in a material increase in the
likelihood or severity of any “loss”,
“pollution
conditions” or “site environmental conditions”,
by mailing to the “first
named insured” at the
“first named insured’s” last known address, written notice stating
when, not less than sixty (60) days
thereafter, fifteen (15) days if cancellation is for non-payment of any
unpaid portion of the premium, such
cancellation shall be effective. The mailing of notice shall be sufficient
proof of notice. The effective date and hour of cancellation
stated in the notice
shall be the end of the “policy
period”.
Subparagraph 2.b., herein, shall apply only to that
“insured” that
engages in the fraud or
misrepresentation. This exception shall not
apply to any “insured”
that is a parent corporation, subsidiary, employer of, or otherwise
affiliated by ownership with, such “insured”.
3. In the event of cancellation, the premium
percentage identified in Item 5.
of the Declarations to this Policy shall
be the minimum-earned premium upon the inception date of this
Policy. Thereafter, the remaining
unearned premium, if any, shall be deemed earned by the
Insurer on a pro rata basis over the remainder of the “policy period”. Any unearned premium amounts due the “first named insured” upon cancellation of this Policy shall be calculated on a pro rata basis and refunded within thirty (30) days of the effective date of
cancellation.
B. Inspection and Audit
To the extent
of the “insured’s” ability to
provide such
access, and with reasonable notice to the “insured”, the Insurer shall be permitted, but not obligated, to inspect
the “insured’s” property and/or operations. Neither the Insurer’s right to make inspections, the making of said inspections,
nor any report thereon shall constitute an undertaking, on behalf of or for the benefit of the “insured” or others, to determine or warrant
that such
property or operations are safe or in compliance with applicable law.
The Insurer may examine and
audit the “insured’s” books and
records during this “policy
period” and extensions
thereof and within three (3) years after the final termination of
this Policy.
C. Legal Action Against the Insurer
No person or organization other than an “insured” has a right pursuant to this Policy:
1. To join the Insurer as a party or otherwise bring the Insurer into a suit against any “insured”;
or
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2.
To sue the Insurer in connection with this
insurance unless all of the Policy terms have been fully complied
with.
A person or
organization may sue the Insurer to recover after an agreed settlement or on a
final judgment against
an “insured”. However,
the Insurer shall not be liable
for amounts that are not payable pursuant to the terms of
this Policy or that are in excess of the
applicable Limit of Liability. An agreed settlement means a settlement and
release of liability signed by the Insurer, the “insured”, and the
claimant or the claimant’s legal representative.
D. Bankruptcy
The insolvency or
bankruptcy of any “insured”,
or any “insured's” estate,
shall not relieve the Insurer of its obligations
pursuant to this Policy. However, any such
insolvency or
bankruptcy of the “insured”,
or the “insured’s” estate, shall
not relieve
the “insured” of its “self-insured
retention” obligations pursuant
to this Policy. This insurance shall not replace any other
insurance to which this Policy is excess, nor shall this Policy drop down to be
primary, in the event of the insolvency or bankruptcy of any underlying
insurer.
E. Subrogation
In the event of any payment pursuant to this Policy by the Insurer, the
Insurer shall be subrogated to all of the rights of
recovery against any person or organization, and the “insured” shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. All “insureds” shall do
nothing to prejudice such rights. Any recovery as a result of subrogation
proceedings arising pursuant to this Policy shall accrue first to the
"insureds" to the extent of any payments in excess of the limit of
coverage; then to the Insurer to the extent of its payment pursuant to the Policy; and then to the "insured" to the extent of the “self-insured
retention”. Expenses incurred
in such subrogation proceedings shall be apportioned among the interested
parties in the recovery in the proportion that each interested party's share in
the recovery bears to the total recovery.
Notwithstanding the foregoing, the Insurer hereby waives its rights to
subrogate against all clients of a “named insured” where such waiver is required by written contract or agreement executed between a “named insured”
and such client prior to the relevant
“claim” or discovery of a
“pollution condition”
or “site environmental condition” to which this insurance applies.
F. Representations
By accepting this Policy, the
“first named insured” agrees that:
1. The statements in the
Declarations, schedules and endorsements to, and Application for, this Policy
are
accurate and complete;
2. Those statements and
representations constitute warranties that the “first named insured” made to the
Insurer; and
3. This Policy has been issued
in reliance upon the “first named insured’s” warranties.
G. Separation of Insureds
Except with
respect to the Limits of Liability, Cancellation condition 2.a., and any applicable exclusions,
this Policy
applies:
1. As if each “named insured” were the only “insured”; and
2. Separately to
each “named insured” against whom a “claim” is made,
and any fraud, misrepresentation, breach of a condition
or violation of any duty (hereinafter Breach) by an “insured”
shall not prejudice coverage for any “named insured” pursuant to this Policy, provided that: 1) such “named
insured’
did not participate in, know of or assist in
such Breach; and 2) such “named insured” is not a parent, subsidiary,
partner, member, director, officer of,
employer of or otherwise affiliated with, the “insured” that committed such
Breach.
H. Other Insurance
1. If other valid and collectible
insurance is available to any “insured” covering
“loss” also covered
by this Policy,
this insurance shall apply as primary insurance. The Insurer’s obligations are not
affected unless any other
applicable,
unaffiliated insurance is also determined to be primary. In that event, the
Insurer shall share with the insurer underwriting such other
insurance by the method described in Paragraph 2., below.
2. Method of Sharing
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If all
of the other insurance permits contribution by equal shares, the Insurer shall
follow this method also. Pursuant to
this approach each insurer contributes equal amounts until it has paid its
applicable limit of insurance or none of the loss remains,
whichever comes first.
If any of the other insurance does not permit contribution by equal
shares, the Insurer shall contribute by limits. Pursuant to this method, each insurer’s share
is based on the ratio of its applicable
limit of insurance to the total applicable limits of insurance of all insurers.
3. Excess
Notwithstanding anything to the contrary contained herein, any coverage
provided by this Policy shall be excess over
and shall not contribute with any other policy of insurance issued in relation
to a specific project, including, but
not limited to,
any owner-controlled insurance
program,
contractor-controlled insurance program, owner’s protective policy, wrap-up policy, builder’s risk policy,
installation risk policy or any other similar insurance, policy or program, whether such other
insurance, policy or program is issued on a primary, excess,
contributory, contingent or other basis.
I. Changes and Assignment
Notice to or knowledge possessed by any person shall not effect waiver
or change in any part of this Policy or estop the Insurer from asserting any right pursuant to the terms of this
Policy. The terms, definitions, conditions, exclusions and
limitations of this Policy shall not be waived or changed, and no assignment of
any interest in this Policy shall bind the
Insurer, except as provided by endorsement and attached to this Policy.
J. Headings
The descriptions in the headings and sub-headings of this Policy are
inserted solely for convenience and do not constitute any part of the terms or conditions hereof.
K. Consent
Where the consent of the Insurer, or an “insured”, is
required pursuant to this Policy, such consent shall not be unreasonably
withheld, delayed, conditioned, or denied.
L. Supplementary Payments
With respect to any covered “claim” or “emergency claim” that the Insurer investigates, settles or defends pursuant
to this Policy, the insurer shall pay for:
1. All internal expenses incurred by the
Insurer;
2. All reasonable expenses incurred by an
“insured” at our
request to assist
us in the
investigation, settlement or
defense of the “claim” or “emergency claim”, including loss of earnings because of time off
work, up to the
aggregate amount of five
thousand dollars ($5,000) per “pollution
condition” or “site
environmental
condition”;
3. All court costs taxed against
the “insured” in a
suit, but such costs shall not include attorneys’ fees or
attorneys’ expenses taxed against the
“insured”; and
4. Up to five thousand dollars ($5,000) in civil fines, sanctions or penalties levied against the “named insured”
pursuant to the American with Disabilities Act of 1990 or the
Occupational Safety and Health Act. Coverage
afforded pursuant to this Supplementary Payment is subject to the
internal laws of the applicable jurisdiction
regarding the insurability of such fines,
sanctions and penalties. The maximum
amount that the Insurer shall
pay pursuant to this Supplementary Payment
shall be fifteen
thousand dollars ($15,000), regardless of
the
number
of “claims”, “emergency responses”, “pollution conditions” or “site environmental conditions”.
The Supplementary Payments identified above shall not be subject
to the “self-insured
retention” of this Policy, but shall, with the exception of internal expenses
incurred by the Insurer in Paragraph 1., above,
reduce and erode the Limits of Liability discussed in
Section II., LIMITS
OF LIABILITY AND SELF-INSURED RETENTION, Subsections C., D. and E., of this Policy, along with any applicable
exposure-specific Limit or Sublimit of Liability added by
endorsement hereto.