Cover story by Jeff Carnahan


into them. This means that for some businesses, your old insurance may only be good for environmental cleanup if the release(s) occurred prior to 1985 or 1986. Not every insurance company includ- ed pollution exclusions at the same time, and not every Canadian province or U.S. state has interpreted those exclusions the same way.


INSURANCE ARCHEOLOGY The goal of looking into your old insurance files is putting together your past CGL port- folio. Don’t panic because your old insurance records are lost, destroyed or non-exis- tent. They may well be recov- erable.


Insurance archeology is the practice of locating and retrieving the proof of the


It is a common misconception that once the policy period is over for a CGL policy, the policy is of no value.


Depending on your specific set of CGL policies and your geographic location, your cov- erage situation may be unique. You don’t know until you look.


THE 3-STEP PROCESS You will need to go through a three-step process to get past your environmental contami- nation woes without breaking the bank. First, you must find your old insurance policies. Second, investigate the extent of the environmental prob- lem. Third, file a claim against those policies and get started with remediation.


existence, terms, conditions and limits of lost or destroyed insurance policies. You will not always be able to track down a full policy. Many times, document archeolo- gists are looking for evidence that a policy existed, and this could be through cancelled checks, cancellation notices, declaration pages, etc. You’d be surprised by the informa- tion your old records can hold that may result in leads for an insurance archeologist. It’s not impossible to locate old policy information if you already have purged your old records, but if you have them, they can be a valuable source


of information when look- ing for evidence or leads to find historical coverage. It’s all about knowing what to look for, chasing down leads, and putting the puzzle back together. Even if your own business records are useless, there is a good amount of hope when a qualified insur- ance archeologist is scouring private and public data sourc- es for the evidence of coverage that you need.


A key point to remember is that if you are on the hook from an environmental lia- bility standpoint, even the policies of former operators and owners will be valuable to you.


DON’T WAIT UNTIL IT’S AN EMERGENCY


Once you and your insur- ance archeologist have reas- sembled the portfolio of past CGL coverage at your site, the process of turning them into valuable financial assets can begin. If there is already a demand against you from Environment Canada or your Provincial Agency, it will be necessary to notify the insurance companies of the demand and file a claim. If you have assembled your his- torical CGL portfolio before you became aware of an envi- ronmental problem, which I


Jeff Carnahan


highly recommend, then you can start the process of finding out if you have a contamina- tion issue. Clearly, knowing that you have CGL coverage in place prior to discovering a contamination problem is gentler on the heart.


Most insurance companies that wrote CGL policies back in the day are well familiar with the process and they know that they may be tapped when latent environmental claims come to light. This does not necessarily mean that they will be happy to hear from you. It is common that hiring an attorney who has expertise in insurance coverage matters makes the process run much more smoothly. These legal costs will not be covered by the old CGL policies. The average cost of an environmental contamination cleanup is over $1 million per site. When you consider that statistic, can you afford not to get your business’s histor- ical CGL insurance assets in order? n


Jeff Carnahan, LPG, is the President of EnviroForensics. He’s a geologist and a scientist, and has been an environmental consultant for over 20 years. For more information on insurance archeology, visit enviroforensics.com or call (+1) 866-888-7911.


2020 March/April FABRICARE CANADA 11


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