THE UNCERTAINTY OF ENVIRONMENTAL RISKS IN A MORE ENVIRONMENTALLY SENSITIVE WORLD

1. THE UNCERTAINTY OF ENVIRONMENTAL RISKSIN A MORE ENVIRONMENTALLY SENSITIVE WORLD

2. Agenda • Environmental Sensitivities & Current Regulatory Climate • Exposures and Considerations • “War Stories”/New Contaminants • Environmental Insurance, Coverage & Enhancements • Open Discussion & Questions • Anthony Wagar Mike Giese • Willis Environmental Practice Chartis Environmental • 212.915.7768 212.458.6244

3. 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.

4. 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

5. 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

6. 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”

7. 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?”

8. Environmental Insurance, Coverage & Enhancements • Contractor’s Pollution Liability • Pollution Legal Liability

9. 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

10. 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

11. THANK YOU! • Open Discussion & Questions