The Environmental Advisor Environmental Division / Great American Insurance Group 1 John Reynolds, Divisional President, Environmental Division Environmental Division Divisional Headquarters 401 Plymouth Road, Suite 100 Plymouth Meeting, PA 19462 888-828-4320 Environmental Division Regional Office 100 Pine Street, Suite 2250 San Franciso, CA 94111 415-477-9400 I hope you ve had an enjoyable summer! Welcome to the latest edition of the Environmental Advisor. We ve certainly kept busy here at Great American Insurance Group s Environmental Division and we thank you for your continued support. We are very pleased to announce the expansion of our product line to include a combined general and environmental liability insurance product that we ve nicknamed GEL PAK. This product offers cost efficient solutions to industries that have pollution exposure that is not adequately addressed in their current general liability insurance program. General liability coverage is now combined with a choice of pollution coverage in one integrated policy. The new GEL PAK product launch will be led by Kevin Troutman. Kevin recently joined Great American s Environmental Division in its Plymouth Meeting, PA office and brings over 20 years of casualty and environmental underwriting experience to his post. The majority of this issue is dedicated to our new product capability, target classes and related topics. Please do not hesitate to contact us with any questions you may have and we look forward to our continued success together. John Reynolds 580 Walnut Street / Cincinnati, OH 45202 / GreatAmericanInsurance.com
2 Great American Environmental Does GL with a twist Kevin Troutman Assistant Vice President, Environmental Division The target classes of business for GEL PAK are: Plastics manufacturing raw material Paints and coatings manufacturers Transfer stations Material recovery facilities Landfills and treatment facilities Water and wastewater facilities Warehouses and storage facilities Cold storage operations Truck yards Miscellaneous light manufacturing Fabricated metal shops We are excited to introduce the newest insurance product from Great American Environmental, the General and Environmental Liability policy the GEL PAK. The new policy provides occurrence or claims made general liability coverage and claims made site pollution coverage that ranges from sudden and accidental coverage to full on-site clean-up. The Great American approach to underwriting this business is to target classes that are site specific and low hazard. These classes have desirable risk characteristics for General Liability and Pollution Liability: Operations are site specific minimal off site exposure Low risk to catastrophe loss Defined premises exposures and identifiable controls i.e. facility security fencing, lights, and cameras in place Public access is negligible or very well contained and controlled The businesses within these classes are established with a loss history. Start up operations will not be underwritten. Low hazard products The policy form is based on the ISO 2007 edition with a general liability broadening endorsement and a pollution endorsement based upon our standard premises pollution policy. The pollution coverage part will be based upon sudden and accidental coverage or full on-site and off site clean-up. Clients and brokers will be able to easily identify the coverage offering by policy prefix and the declarations page. The policy can be customized to meet the client s needs by adding ISO or pollution endorsements. Policy Benefits Products Pollution Coverage Aggregate limit per location Broad Form Property Damage Broad Form Personal Injury Limited Product Recall Expense Increased limits for Medical Payments and Damage to Premises Rented by the Insured Site pollution coverage customized to meet your customers needs and can include both sudden and gradual pollution events continued on page 3
3 GEL PAK General & Environmental Liability Policy Highlights Coverage available for both on-site and off-site pollution with a claim and discovery trigger mechanism Coverage available for pollution issues at Non-Owned Disposal Sites A broad definition of pollutants which includes mold matter, petroleum hydrocarbons and EMFs. Coverage available for Natural Resource Damages. Policy Features General Liability Aggregate Limits of Liability up to $2,000,000 Site Pollution Aggregate Limit of Liability up to $25,000,000 $25,000 minimum premiums $10,000 minimum retentions on pollution coverages Covered locations in both the United States and Canada Separate limits can be applied to each coverage part. We are looking forward to underwriting your submissions that fit within our target classes and hazard profile. Submission Requirements General Liability Acord application The prospective client s past five years loss history The prospective client s last two years financial statements and/or 10k report The most recent environmental reports and a completed Great American Insurance Company General and Environmental Liability supplemental application
4 Cost Savings in a Difficult Economy - When GL is Not Enough Robert Potter Divisional Vice President, Underwriting With the economy continuing to play a large part in purchasing decisions it is important to consider ways to get the most coverage out of your existing insurance policies. Many insureds in the manufacturing sector do not carry environmental liability insurance of any kind, but everyone carries a general liability (GL) policy, the vast majority of which contain a total pollution exclusion. With Great American s new GEL PAK, insureds may greatly enhance the liability coverage they carry by adding both premises and products pollution liability coverage to their GL program without having to purchase a whole new line of insurance. Though a client in the manufacturing sector may have never experienced a pollution event in the past, they should certainly consider the potential impact of such an event on their bottom line in the future. Though pollution conditions do not tend to happen with much frequency, when they do happen they can be catastrophically expensive to handle. In these days of slim margins a company simply cannot afford to gamble with such potentially costly events and the impact they may have to a company s bottom line. Even if a company has excellent controls in place to prevent pollution from occurring, accidents do happen. The paint and coatings industry is an example of a class of business with desirable risk characteristics for our new product. According to the U.S. Environmental Protection Agency (EPA) the U.S. paint and coatings industry contributes roughly $20 billion per year to the U.S. economy and generates around 1.5 billion gallons of paint and coatings products per year. There are a variety of hazardous materials used in the manufacturing process including various acrylics, resins, epoxies, solvents, metals, oils and pigments. These materials are generally stored in significant quantities on a manufacturing plant and can lead to contamination of the environment by such compounds as heavy metals, including lead and chromium, as well as volatile organic compounds which can emit vapors, many of which have both long and short term health effects. Costs associated with such claims can be well into the millions of dollars. The risk for pollution does not end when a product leaves the manufacturing plant. The end product can also cause pollution at various stages in the chain of commerce. Storage containers may leak at the purchaser s location resulting in legal liability for cleanup costs or paint may emit toxic vapors after being applied resulting in bodily injury to third parties. The Great American GEL PAK provides an extension to the products liability coverage which includes products pollution. The products pollution enhancement on our GEL PAK provides significant additional coverage to the products liability section of a standard GL policy. Saving money in a challenging economy is not just about trimming costs. It is just as much about getting more for your money and protecting the bottom line from unexpected damaging events. Whether a stand alone environmental product or a combined product like the GEL PAK, pollution liability insurance is a smart way of getting the most out of your suite of insurance products.
5 Claims Corner Bob Burkholder VP, Environmental Claims GL Claims Handling Experience to Count On Hopefully you are already familiar with the exceptional claims handling abilities available for all of the environmental products we offer the current staff averages over 17 years of experience in handling these complex coverages. Now complimenting those capabilities are a cadre of claim professionals within Great American with an average of over 30 years of general liability claim-handling experience. From the moment coverage is bound, our GEL PAK clients will have expert claimhandling services available to them. Prompt response to any claim or incident is ensured by our 24/7/365 Emergency Response Hotline and our dedicated claim e-mail address and fax number. As always, please do not hesitate to contact me if you have any questions about our claim-handling capabilities. Claim Scenarios Examples A forklift operator in a warehouse facility accidentally punctured a plastic tote storage tank with the forks as he rounded a corner. The tank released 125 gallons of solvent before it could be controlled. The majority of product was captured but some did escape through cracks in the floor slab to the subsurface soil. The facility owner ended up paying over $600,000 to test the sub-slab soils and groundwater as well as to excavate and dispose of 25 cubic yards of contaminated soil. A plastic manufacturing company experienced a fire in one of their plants. The resultant smoke required nearby residents to stay in their homes and caused areas businesses to close. Lawsuits claiming bodily injury and business interruption were quick to follow. Legal expense alone totaled over $300,000 and business interruption claims payments exceeding $1,500,000. A paint manufacturer was named in a lawsuit claiming, among other things, that their product was responsible for the claimant s bodily injury and emotional distress when she was overcome by the product s fumes. Defense expenses, expert witness fees, and the ultimate payment to settle the lawsuit was over $700,000. An individual was dropping off old paint cans at a community waste collection day held at a local waste transfer facility. After inadvertently wandering into a restricted area, he was severely injured when he fell into one of the waste consolidation pits. Claims for bodily injury and emotional distress are pending against the facility. Robert Burkholder
6 EnviroMoments Pete Pantalone Great American is sponsoring its second corporate GreatHealth Challenge to promote the health and wellbeing of its employees. Bill North Update - Where s Pete? Great American Insurance Group has recently been named one of the Healthiest Companies in America by Interactive Health Solutions, the nation s premier provider of health awareness and preventative care programs for U.S. employees. Great American s innovative incentives to encourage its employees to change unhealthy lifestyle habits debuted in 2008 and has proven very successful! Great American is sponsoring its second corporate GreatHealth Challenge to promote the health and well-being of its employees. One way employees can participate is by purchasing pedometers with the goal of walking 1,000,000 steps by September 30th. To date, the Environmental Division has been representing well among the various Great American Business units and at last count was in first place with an average of 12,526 steps per day. Bill Forrest Gump North has led the charge for the Environmental Division, logging more than 1,535,812 steps. That s like walking 775 miles nearly the distance from our Plymouth Meeting headquarters in Pennsylvania to St.Louis, Missouri! Here are stats for the rest of our crew keep up the good work! Name Step Count Aerobic Steps Distance (miles) Bill North 1,535,812 773,792 775 Doug Stepenosky 1,186,453 248,207 561 Pete Pantalone 1,081,696 95,115 443 Jenny Han 1,006,545 318,232 397 Bill North is now leading the charge for the Environmental Division. Great work, team! The insurance product and coverage descriptions in this brochure are summarized. Please refer to the actual policy declarations and policy form for a complete description of all applicable terms, conditions, limits and exclusions. Claim examples are fictitious and provided for illustrative purposes only. The insurance products described in this brochure may not be available in all jurisdictions. All products are underwritten by one of the following surplus lines insurers: Great American E & S Insurance Company, Great American Fidelity Insurance Company or Great American Protection Insurance Company. The information presented herein is not intended as a solicitation or offer to sell any insurance product in any jurisdiction in which such solicitation or offer, or any sale or purchase of the described insurance products would be unlawful under the insurance laws and regulations of such jurisdiction.