Document Archeology to the Rescue
E
nvironmental contamination issues could be the death of your dry cleaning business. Depend- ingon the amount of time you’ve been in the industry, you’ve either lived through a cleanup, have a lump in your throat about when the time is going to come to sell the business or prop- erty, or you’ve heard the horror stories about the high cost of perc cleanups from your peers. The bad news is that old releases of perc can cause serious environmental problems and cost into the millions of dollars to handle. The good news is that for a lot of folks, your old Commer- cial General Liability (CGL) insurance policies can be used to pay for cleanup, plus legal help.
COMMERCIAL GENERAL LIABILITY POLICIES
Commercial General Liability (CGL) policies are standard slip-and-fall policies that protect the policyholder against claims made for damages caused by employees, work products and waste products. These policies will typically cover circumstances when a property is damaged by con- tamination. It is a common misconception that once the policy period is over for a CGL policy, the policy is of no value. That couldn’t be further from the truth, because environmental releases that occurred in the past while those CGL policies were in effect, are still covered by them today. Most perc releases occurred during the days of transfer machines and the first few generations of closed-loop machines. So, when you think about whether you may have an environmental problem, think about the history of the business and the property, not your current operations. During the mid-1980s, many insurance companies decided that they wanted to specifically exclude contamination issues from CGL policies, so they started writing a Pollution Exclusion
10 FABRICARE CANADA March/April 2020
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