Study 4 - Environmental Liability Flashcards
Strong and consistent national standards would establish consensus with respect to such issues as:
- AST’s and UST’s
- Hazardous waste management
- Wastewater management
- Hazardous waste site identification and remediation; and
- Pollution prevention
Canadian Environmental Protection Act (CEPA)
- Chief federal act responsible for the environment
Governs the: - identification, assessment, and management of toxic substances; and
- regulation and control of the discharge of these substances into the environment
Environmental Protection Act (EPA) & Environmental Bill of Rights (EBR)
The main legislative components in Ontario to protect and conserve the environment
EPA governs:
- The regulation of the discharge of contaminants
- Control, stop, remedial, and prevention orders
- The management of spills
- The management and disposal of hazardous waste
EBR governs:
- Public participation in environmental decision making
- Governmental accountability for provincial and territorial environmental decision making
- Access to the courts for private citizens; and
- Protection for employees who take action against environmental harm
Special Damage
Actual loss from the natural, not the necessary, consequences of the subject of complaint; for example, specific payments for medical bills or car repairs. In third- party claims, it means the damages may be proved with documents.
Plaintiffs used to be required to show that a kind of special damage had occurred before they could sue. No longer the case.
Strict Liability
Liability imposed by a court or by a statute in the absence of fault when harm results from activities or conditions that are extremely dangerous, unnatural, hazardous, extraordinary, abnormal, or inappropriate
Joint and Several Liability
Means that every person identified as a polluter may be liable for the entire amount of the clean-up cost, regardless of how much that particular polluter contributed to the pollution
Retroactive Liability
Covers a loss that occurred before the insurance was purchased; covers liability for incidents related to the property or person not yet reported to an insurance company
Environmental Hazard Classification
- Minimal exposure businesses and professional services are unlikely to cause damage to the environment (stockbrokers, real estate agents, office buildings, retail electronic stores)
- Low-hazard businesses are not likely to cause significant environmental damage. Includes many construction and installation businesses, schools, motels, most food processing companies, department stores.
- Medium-hazard businesses may sometimes cause significant environmental damage. Both the complexity and magnitude of operations may affect the level of risk and exposure. Businesses at this level include drycleaners, most farming operations, medical labs, manufacturers of cement and concrete, golf courses, auto repair garages.
- High-hazard businesses can be expected to cause significant environmental damage. Businesses in this category include manufacturers of pulp and paper, petrochemicals, gases, pesticides, fertilizers, gas bars and service stations, fuel dealers and gas companies
Historical Environmental Information Report System (HEIRS) provides 2 levels of service
- Copies of available fire insurance plans, inspection reports, and property plans of the site
- Analysis of potential contaminants on site by engineers using the historical data
Researching the sources of historical information will usually identify:
- Property uses at various times
- Above and belowground storage tanks
- Transformers
- Electrical rooms; and
- Other details that may point to an environmental exposure
Different Environmental Studies (Audits/Assessments)
Environmental Audit
- Non-intrusive
- Useful to issue policy
- Systematic obtaining and evaluating of evidence
Phase I ESA
- Non-intrusive
- Useful to issue policy
- Determines likelihood of contamination being present on site
Phase II ESA
- Intrusive
- Less useful to underwriters
- Identifies and quantifies the nature and extent of the contamination
Phase III ESA
- Involves remediation planning
- Remediation work not always necessary even if a contaminant is found
Phase IV and V ESA’s
- Both deal with site-specific remediation plans
Diligence Checklist
- Identify environmental regulations, standards, and guidelines that apply
- Assess whether the company is in compliance with the regulations, standards, and guidelines
- Monitor compliance
- Appoint an individual to apply corporate environmental policy and prepare regular reports to a senior office and the board of directors
- Implement environmental control practices
- Improve existing systems
- Train staff to ensure environmental policy is effectively applied
- Prepare an emergency response plan
Reasonable Expectations Doctrine
- Allows the court to take into account what an insured reasonably expects to be covered
- The court will look at the wording, what the parties intended, and construe any ambiguities in favour of the insured
- The intent is to seek a fair interpretation of the policy even when certain provisions appear to negate coverage
3 circumstances for insuring pollution liability successfully
- Harmonization of environmental legislative standards
- More details measurement tools for underwriters
- Predictable and reasonable court decisions
Potential Pollutants
- Waste materials
- Raw materials
- Good in process
- Fuels
- Finished products
