In the weeks following the implosion of a massive tank at a Washington paper mill that killed 11 workers and spilled hundreds of thousands of gallons of
chemicals, believed to be the deadliest industrial accident in state history, managers of similar operations have been dialing up their insurance brokers to find out how well they’re protected.
It took days to recover all the bodies of missing workers who died in the May 26 blast at the Nippon Dynawave site in Longview. In additional to the work
ers killed, seven other workers and a firefighter were also injured by burns from the chemical known as white liquor that was spilled in the blast.
With the deaths, damage and spillage into the Columbia River, as well as potential lawsuits already lining up, it’s likely to be a costly event for the plant’s owners. It’s not i
mmediately clear what coverage the operation has or who insures it. But the event, which has been heavily reported on by media, has other manufacturers in the industry checking on their insurance coverage.
Brokers in the environmental specialty line are fielding calls from clients to discuss their coverage, according to Dennis Willette, senior vice president and head of env
ironmental at Westfield Specialty Insurance.
“I’ve had a lot of inbound calls from my brokers, who have been receiving a lot of inbound calls from their clients,” he said.
Many general liability policies have a pollution exclusion structured mainly to address this type of issue, which is why the environmental market exists.
Brokers like Westfield Specialty provide coverage on an excess basis, and the market also provides
a combined general liability and pollution program. There are myriad ways to buy these coverages. Some insureds buy a limited time-element coverage, others a broader coverage.
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“Depending on what they buy will really dictate the level of coverage that they have, and then further to that, one of the challenges is that the aggregate is typical
y shared with their general liability,” Willette said. “And if they buy the pollution coverage, it may not be available to them depending on whether or not their limit has
been exhausted by any other general liability claims and vice versa. If there’s a large pollution claim such
as this, their general liability limit may be exhausted by the pollution limit, so that’s the blended model.”
The environmental line also offers dedicated towers of pollution liability insurance for clients not shared with the general liability policy, providing affirmative and often broader pollution coverage, he added.
