ECS Underwriting Enhances Pollution Insurance Program Designed for Petroleum Facilities

ECS, Inc., an XL Capital company and a leading provider of environmental insurance to business and industry worldwide, has enhanced its pollution insurance program developed specifically for petroleum bulk storage facilities, distributors, marketers and refineries.

``The petroleum industry continues to show increased interest in environmental insurance to help fill gaps of coverage left by their general liability and property insurance,'' said Scott Britt, vice president of ECS Underwriting's Industrial and Commercial Facilities customer business unit. ``Over the last year alone, ECS has seen a 44 per cent increase in submissions from the industry.''

According to Britt, ECS clients give many reasons for purchasing environmental insurance and they include:

• Concern over underground storage tanks (UST), aboveground storage tanks (AST), and pipeline releases
• Concern about spills during the loading and unloading of products
• Difficulty in distinguishing the source and responsibility of contamination
• Back up of environmental indemnity agreements
• Concern over Superfund liability
• Requirement for lease, purchase or sale of real estate agreement
• Financial responsibility requirements

``ECS has designed a program that specifically meets the industry's needs and now is backed by the financial strength of the XL Capital group of companies,'' said Britt. ECS Underwriting writes environmental coverage on behalf of U.S. insurance subsidiaries of XL Capital rated A+ (Superior) by A.M. Best.

ECS Underwriting's Pollution Insurance Program for Petroleum Facilities can provide historical and ongoing coverage for preexisting and new pollution conditions.

Policy features include coverage for on-site and off-site remediation expense; third-party coverage for on-site and off-site bodily injury and property damage; and remediation expense and third-party bodily injury and property damage from use, maintenance, operation loading or unloading of vehicles at covered locations. Coverage is also provided for ASTs, USTs and piping systems.

Additionally, the policy covers third-party bodily injury and property damage claims for lead paint and asbestos, contingent transportation liability, and business interruption and extra expense due to pollution conditions. Naturally occurring radioactive materials (NORM) are also covered. Enhancements are available to cover ``Superfund liability'' associated with off-site disposal and property transfer/divestiture protection.

According to Britt, the potential for sudden and accidental releases from aboveground tanks, pipeline ruptures and loading/unloading areas are of great concern to facilities. Other concerns, however, include the gradual release of air emissions, soil/groundwater contamination from historical operations, slow leaking pipelines and underground tanks, and the potential for inclusion in local or regional soil/groundwater contamination issues.

``As there is increased concern for environmental liability during the transfer, purchase or lease of property, the program can be tailored to meet the needs of all parties in a transaction,'' said Britt. He explained that ECS recently constructed an insurance program specific to the needs of a petroleum distributor, which was selling 13 of its facilities. ``The insurance program helped allay the environmental liability concerns of the buyer and inevitability help the transaction close,'' he said.

Companies insured by ECS also can receive risk control and claims management services.