An environmental insurance claim is simply the response and mitigation of an environmental issue or event paid for by an environmental insurance policy. Similar to an auto or home insurance claim, a company or individual purchases this type of policy to protect them in case a matter arises about their facility, operations, or property resulting in a regulatory requirement for investigation and remediation; forming the basis for a submitted claim. Such responses cost money, often a lot of it, and the environmental insurance policy is there to pay for the costs associated with the investigation and remediation of any environmental issues.
Any environmental issue can result in an environmental claim, so it is essential that you have the right policy in place to cover a particular claim. Typical issues or events include:
Insurance clients submit notice to the insurance company that an environmental issue occurred or was discovered which requires investigation and corrective action. The onus is on the client to provide sufficient information to substantiate a claim submittal. The insurance company reviews this information in their evaluation of coverage for the issue under the policy.
When a new claim is submitted to the insurance company, the client must provide information that substantiates that an issue exists and that further investigation and corrective action is required. Often their substantiation consists of the initial technical details about the nature and extent of the environmental problem. Claims analysts generally have a strong legal background but may lack technical environmental expertise; this is when insurance support services become valuable. The following paragraphs summarize each step in the process and how SCS insurance support assists claims analysts through the process.
Once the insurance company receives a notice of claim, they determine whether the client’s policy provides coverage for the specific issue or event that constitutes the claim. A claims analyst evaluates the specifics of the claim to determine if the associated details and circumstances fall within the specifics of the client’s policy. If so, coverage is usually accepted. If not, coverage is generally denied.
SCS’s role is to provide an evaluation of the technical aspects of the claim so that the claims analyst can take the distilled facts and compare them against the specifics of the policy; often called a “Source and Timing” evaluation. Take, for example, an underground storage tank (UST) release at a gasoline station. In this example, free product (gasoline) is observed in an on-site monitoring well where no free product has previously or recently been identified.
The station owner or their environmental consultant reports the apparent new release to the regulator, and a confirmed discharge is recorded. The property owner than notifies the insurance company of a gasoline release to the environment.
As part of the “Source and Timing” evaluation, SCS’s insurance support reviews tank system leak detection and inventory records, tank system tightness testing records, previous groundwater monitoring data, reports of any earlier releases at the facility, and any other information or data about the facility and the subject release. The goal is to identify:
If enough information is available to make these determinations, then the claims analyst compares the SCS report to the coverage specifics and exclusions included in the policy; determining if the event is covered. The claims analyst will usually try to make a coverage determination on their own if the facts are relatively straightforward, but often that is not the case, and the assistance of insurance support services is necessary.
This process can be straightforward, such as in the case of a tanker truck rollover or industrial facility chemical spill, but is often more complicated when insufficient information is available to make a source and timing determination. In the latter case, the claims analyst issues a Reservation of Rights letter, stating that the insurer is not accepting or denying coverage at this time as the circumstances of the claim are still under evaluation and investigation.
Claims can be denied if the incident occurs before or after the policy period; if the source or type of incident are not included or are specifically excluded under the policy; or if the incident occurred because of the client’s negligence. If coverage is denied no further actions are generally necessary on the part of the insurance company. Whether a claim is accepted or denied is often more complicated than what we’ve discussed here.
The claim is accepted; undoubtedly good news for the client. What happens now is that the claim becomes “Active,” requiring among other things for the claims analyst to set reserves. A reserve is an estimate of what the claim is going to cost the insurance company. Your insurance support consultant can provide a rough approximation of the estimated costs to achieve regulatory closure, which includes all expenses incurred from investigation through remediation, post-remediation monitoring and reporting.
Early in the life of a claim, these are preliminary estimates that are refined as a project progresses, often requiring the claims analyst to adjust their reserves; important to the insurance company as future reserves impact financial forecasts. Insurance support services will develop the cost-to-closure estimate based on all available information and data, as well as their professional experience on similar projects. The insurer wants the most experienced environmental consultants and engineers on the case because their estimates are more likely to be on target and identify potential regulatory issues or risks.
From the insurer’s standpoint, the primary goal is to maintain a high level of responsiveness to their clients and process requests for reimbursement against the claim. The role of your insurance support team can continue by managing quality control and evaluation of site-specific activities; ensuring that the investigation and cleanup are reasonable and appropriate given the environmental conditions at the site, all applicable regulatory requirements, and costs consistent with industry standards for recovery. The client and their environmental consultant are required to provide the insurer and the insurance support consultant documentation of the work as follows:
Over the life of a claim, insurance support may correspond with the project consultant on behalf of the insurer, conduct site visits, and be asked to participate in meetings, conference calls, and mediations. The overall goal of your insurance support consultant is to assist claims analysts in closing a claim in the most time-efficient, cost-effective manner possible within all regulatory rules and guidelines.
Once an active claim−environmental project has achieved regulatory closure, the claims analyst begins the administrative process of closing the claim. From SCS’s insurance support standpoint, all that remains is to obtain the appropriate documentation from the regulator confirming that the subject project is approved for closure and that no further actions are required.
There are other circumstances which may result in closing a claim, such as exceeding the maximum total cost that can be paid out by the policy, non-compliance with policy requirements, or new information coming to light which results in a change in coverage position by the insurer. In some cases, such as when there is a change in coverage position or the cause of the issue can be attributed to a third party equipment failure, the insurer may seek to recover costs expended from the client and third-party policies. That process, called subrogation, may require the expertise of your insurance support specialist and at times their testimony as an expert witness.
There are several ways that SCS helps our insurance clients and other clients. The involvement of insurance companies is becoming more pervasive throughout environmental consulting and engineering in all business sectors. The combination of SCS’s industry expertise, contacts associated with our insurance support services, and our Federal, State, and local level regulatory expertise brings more knowledge and efficiency to each project. SCS offers a wide range of engineering and environmental services, a national presence, and a positive established industry reputation.
Our clients appreciate being able to draw upon our insurance-related expertise to assist them with their submittals, interpreting insurance requirements, and liaising with insurance companies as part of our core capabilities.
Mr. Michael Schmidt is an accomplished industry leader with nearly 30 years of progressively responsible experience in the environmental consulting and environmental insurance industries. He has specific expertise focusing on the evaluation of environmental risks and liabilities associated with insurance claims and underwriting, site investigation and remediation, due diligence, and project management.
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Before the Court: EPA admits that it has failed to meet its nondiscretionary obligations to implement the Landfill Emissions Guidelines, as compelled by the CAA. The only questions before the Court were whether the Plaintiffs have standing and, if so, how long to give EPA to comply with its overdue nondiscretionary duties under the Landfill Emissions Guidelines. The Plaintiffs are the States of Illinois, Maryland, New Mexico, Oregon, Rhode Island, California, Vermont, and the Commonwealth of Pennsylvania.
Ruling: Plaintiffs have standing, and the EPA must approve existing submitted plans by September 6 and issue the federal plan by November 6.
Impact on Landfill Owners/Operators: This will create some confusion, as landfills will be working on getting revised rules in place while at the same time start complying with the old EG rule. We are already doing that with XXX sites, but this ruling adds complexity. If EPA keeps to the schedule and we have final approved revised rules by March 2020, landfills won’t have to do as much under the old rules before new ones take effect.
Air rules are complicated. Landfill emissions differ from typical industrial sources resulting in rules that vary in significant ways. If you’re a landfill owner responsible for compliance, a regulator charged with monitoring landfills, or new to the industry, join us for this informative Air & Waste Management Association live presentation. The webinar will help you will learn how the rules affect landfills, understand what must be submitted and when, and the steps to take for compliance.
This paper, presented at A&WMA’s 111th Annual Conference details the Tier 4 process and the potential issues that have arisen from conducting a Tier 4. This paper also assesses potential Tier 4 sites, exceedance reporting, wind monitoring, additional SEM equipment requirements, penetration monitoring, notification and reporting requirements, and impacts on solid waste landfills that will use the Tier 4 SEM procedure for delaying GCCS requirements. This paper reviews the changes between the draft NSPS and the final version of the new NSPS that was promulgated.
Click to read or share the paper, and learn about the authors.
This article discusses global air quality and how the collaboration between policy-makers and the scientific community can have a continued positive impact on air quality in the U.S. This collaboration has been the primary cause for the improvements observed in air quality over the past few decades.
U.S. Environmental Protection Agency (EPA) programs, such as the New Source Performance Standards (NSPS), New Source Review, and Maximum Achievable Control Technology standards, have all had a significant impact on improving air quality by lowering the ambient concentrations of NOX, VOC, CO, SOX, and PM.
Some areas, such as southern California, have committed to working toward electrifying the transportation network, implementing more stringent standards on diesel fuel sulfur content, and encouraging heavier utilization of public transportation.
Author: SCS Engineers’ Ryan Christman, M.S., is an air quality engineer and environmental management information systems specialist with experience in the oil and gas industry and the solid waste industry. He is just one of SCS’s outstanding Young Professionals.
A look at the confusion stemming from regulatory uncertainty of new rules limiting air emissions from municipal solid waste landfills by David Greene, P.E., SCS Engineers – Asheville, NC.
The landfill industry continues to work with EPA Administration to get a longer-term stay to work out needed NSPS/EG rule changes. At this time, industry representatives are hopeful both these related goals can be achieved.
While the new NSPS/EG rules became effective back in 2016, the concerns with the rules raised at the time still remain unresolved. Despite this, we can expect resolution though it may take some time to fix. The fog should be lifting, yielding changes that are expected to be more workable for both the landfill industry and state/local regulators. In the meantime, stay tuned and stay informed.
Read the full article with links to the NSPS/EG update in a recently published SCS Technical Bulletin.
SCS Engineers periodically prepares Technical Bulletins to highlight items of interest to our clients and friends who have signed up to receive them. Our most recent SCS Bulletin summarizes the new rules which took effect on October 28, 2016, with compliance obligations under the NSPS Subpart XXX rule beginning November 28, 2016. Originally, states and local air jurisdictions were to submit their proposed EG rules by May 30, 2017; however, there have been some delays in this process, which we condense and detail in this Bulletin. SCS will continually update coverage of this Rule on our website.
Tuesday, October 10, 1:00 pm – 2:30 pm ET
This Air & Waste Management Association webinar covers the effective, sustainable operation of municipal solid waste (MSW) landfills in today’s changing environment.
The latest updates to EPA regulations in over two decades limiting air emissions from landfills will be reviewed in detail.
Participants will learn the available models for quantifying landfill gas generation emissions and which model to use in different situations as well as energy recovery from landfill gas, its emissions, and how control requirements can affect feasibility.
Oil and gas processing facilities, federal and local governments, landfills, land developers, contractors, industries with industrial hygiene plans can spend too much money for too little information if they don’t have an understanding of the limits and capabilities of their equipment and methods before the development of their Air Monitoring Plan (AMP) . That’s before considering the risk to their employees and to public health.
Even if you can’t afford a dedicated air monitoring group, you can eliminate the health risks, overwriting a plan, or overburdening your budget. A cost-benefit analysis and integrating stakeholders’ goals can help provide the guidance you need to develop a balanced air monitoring plan.
Start with this list of considerations when developing an Air Monitoring Plan (AMP). The list is followed by tips and suggestions which are helpful under specific circumstances.
Location of the monitoring site is initially dependent on the monitoring objective. For example, once it is known that there is a requirement to monitor for peak ambient H2S at a microscale site, it reduces the monitoring site location to specific areas. Hence, the first task when evaluating a possible site location is to determine the scale for which a candidate location can qualify by considering the following:
1. Location and emissions strengths of nearby sources, especially major source;
2. Prevailing wind direction in the area;
3. Nearby uniformity of land use;
4. Nearby population density.
To select locations according to these criteria, it is necessary to have detailed information on the location of emission sources, the geographical variability of ambient pollutant concentrations, meteorological conditions, and population density. Therefore, selection of the number, locations, and types of sampling stations is a complex process. The variability of sources and their intensities of emissions, terrains, meteorological conditions and demographic features require that each network is developed individually. Thus, selection of the network will be based on the best available evidence and on the experience of the decision team.
Developing an Air Monitoring Plan (AMP) can be a daunting task. There are many decisions to make that have downwind ramifications relative to budget, logistical constraints, and labor requirements. In addition, there may be competing goals in regards to the project stakeholders. SCS has the experience developing and implementing air monitoring plans and systems to meet these challenges; including developing site specific and network-wide AMPs for various monitoring objectives. SCS also understands the costs and demands of the implementation of AMPs on industry and government.
If you need to perform Air Monitoring or are in the initial steps of developing an AMP please contact firstname.lastname@example.org for expert advice and guidance specific to your region and industry. We have robust programs and experts nationwide. We can also incorporate the use of remote monitoring controls and monitoring by our FCC authorized drones.
Author: Paul Schafer, SCS’ National Expert Ambient Air Monitoring
EPA is proposing a GHG SER of 75,000 tons per year (tpy) Carbon Dioxide equivalent (CO2e) and requesting comment on it as well as two lower levels, specifically 30,000 tpy and 45,000 tpy CO2e, respectively.
The Associations do not believe there is sufficient information to support lowering the GHG SER below the proposed 75,000 tpy CO2e level and provided a table utilizing equivalent criteria pollutants from combustion sources (i.e., NOx, CO) yields CO2 emissions as high as 780,000 tpy CO2.
EPA already concluded in USEPA, Proposed PSD Revisions Rule, 81 FR 68137 that the burdens of regulation at a GHG SER level between 30,000 and 75,000 tpy CO2e would yield a gain of trivial or no value from both a programmatic and individual project-level perspective. Therefore, NWRA and SWANA strongly recommend EPA retain proposed GHG SER of 75,000 CO2e (or higher), and resist pressure to lower the GHG SER.
On the Topic of Biogenic GHG Emissions, the EPA’s final rule requires clarification to remain consistent with previous documentation and research to prevent significant permitting delays and increased costs that will not result in meaningful emission reductions.
The Associations encourage the EPA to ensure that waste-derived biogenic CO2 (e.g., from municipal solid waste (MSW) landfills) is treated as carbon neutral under the final PSD Permitting Revisions Rule to be consistent with prior Agency determinations specified in this memorandum and documents as follows:S. EPA, Memorandum Addressing Biogenic Carbon Dioxide Emissions from Stationary Sources, McCabe, Janet, November 19, 2014.
S. EPA, Memorandum Addressing Biogenic Carbon Dioxide Emissions from Stationary Sources, McCabe, Janet, November 19, 2014. The documents highlight waste-derived, biogenic CO2 as a type of “carbon neutral” feedstock based on the conclusions supported by a variety of technical studies and conclusions of the Agency’s latest draft Framework for Assessing Biogenic Carbon Dioxide for Stationary Sources, which was released with the memo. The Agency memo stated that “the Agency expects to recognize the biogenic CO2 emissions and climate policy benefits of such feedstocks in [the] implementation of the CPP.”
US EPA, Emission Guidelines for EGUs, 80 FR 64855. Both the revised Framework, and the EPA’s Scientific Advisory Board (SAB) peer review of the 2011 Draft Framework, found “that the use of biomass feedstocks derived from the decomposition of biogenic waste in landfills, compost facilities, or anaerobic digesters did not constitute a net contribution of biogenic CO2 emissions to the atmosphere.”
S. EPA, Appendix N. of Revised Framework for Assessing biogenic Carbon Dioxide for Stationary Sources, November 2014, pg. N-25. In Appendix N. of the Framework, entitled Emissions from Waste-Derived Biogenic Feedstocks, EPA calculated negative Biogenic Accounting Factors (BAF) for various examples of treatment of landfill gas via collection and combustion. EPA explains, “Negative BAF values indicate that combustion of collected landfill gas feedstock by a stationary source results in a net CO2e emissions reduction relative to releasing collected gas without treatment.”
US EPA, Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Generating Units; Final Rule [Emission Guidelines for EGUs], 80 FR 64885. “[T]he use of some biomass-derived fuels can play a role in controlling increases of [in] CO2 levels in the atmosph The use of some kinds of biomass has the potential to offer a wide range of environmental benefits, including carbon benefits.”
US EPA, Emission Guidelines for EGUs, 80 FR 94855. Types of waste-derived biogenic feedstocks may include: landfill gas generated through decomposition of MSW [municipal solid waste] in a landfill; biogas generated from the decomposition of livestock waste, biogenic MSW, and/or other food waste in an anaerobic digester; biogas generated through the treatment of waste water, due to the anaerobic decomposition of biological materials; livestock waste; and the biogenic fraction of MSW at waste-to-energy facilities.
NWRA and SWANA believe the final PSD Revisions document should follow the approach to waste-derived feedstocks enshrined in the Final Clean Power Plan, and as recommended by the SAB, and ensure that waste-derived biogenic CO2 is treated as carbon neutral. Based on EPA’s own lifecycle assessments for the Renewable Fuels Standard program, its U.S. GHG Inventory, and confirmed by the SAB, EPA has sufficient analysis to support exclusion of selected categories of biogenic emissions from PSD permitting, including those from managing landfill gas and organic components of MSW.
The EPA does not seem to consider the regulatory treatment of biogenic CO2 from stationary sources to be a key issue in the context of the PSD revisions rule, based on a comment found in a Summary of Interagency Working Comments on Draft Language. Instead, the EPA continues to believe this rulemaking to establish a GHG SER under the PSD program is not the appropriate venue to address the broader concern of the regulatory treatment of biogenic CO2 from stationary sources.
The Associations strongly disagree and are concerned that because EPA remains silent on this important issue, some permitting authorities might improperly require landfills to incorporate biogenic CO2 emissions in the PSD permitting process. Historically, few landfills triggered PSD because non-methane organics emissions rarely reached the threshold. However, if biogenic CO2 emissions become subject to PSD, many landfill projects, which are “anyway sources” due to renewable energy projects, would also be forced to do BACT analysis for GHG. Biogenic CO2 is emitted from:
From the perspective of developing new renewable transportation fuel or energy projects, subjecting biogenic emissions from landfills to PSD could be an enormous barrier. The Associations would like the EPA to clarify in its final rule that the emissions of biogenic CO2 from treating or controlling landfill gas does not increase the CO2 levels in the atmosphere, but instead, has positive emission reduction and climate benefits. Failing to clarify this important point could subject landfills to significant permitting delays and increased costs that will result in no meaningful emission reductions.