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Pollution raises broad concerns.

Pollution Raises Broad Concerns

As government and business grapple with pollution problems, the burden of keeping track of regulatory developments, advising on proper courses of action and other issues regarding loss control and safety falls directly upon those managing these liabilities.

Businesses are realizing that environmental decisions are a top priority. "Consider ethics in deciding how you are going to deal with environmental exposures," said Dr. George Head, vice president of the Insurance Institute of America. "It's a better basis for making decisions that you and your community can live with. Think of how your conduct is impacting the environment as well as your duty to future generations."

These decisions take on large proportions considering that environmental impairment is found everywhere--in product liabilities, workers' compensation, life and automobile incidents, according to Michael Tiller, principal of Tiller Consulting Group, Inc. He said although companies seemed to be focused on the catastrophic claims, there are smaller claims, those of high frequency and low severity, which can also significantly impact a company's balance sheet.

Most importantly, Mr. Tiller urged a more robust environmental analysis by looking at these hazards from a long-term view. "The earth is in a constant state of change," he said.

On a local scale, Dale Bitter, assistant vice president of risk manager for CSX Rail Transport. a major rail transport company, said his company's risk management division employs more than 70 managers due to the potential severity of and the complexity of the issues arising out of an occurrence. For instance, in a pollution incident, there are usually several governmental and consumer agencies on the spot, including the National Transport Safety Board, OSHA, local police and fire departments, the EPA and the press. "People must be on hand to address the concerns of all these people," he said. "Otherwise, we are managing regulations instead of managing the environment."

It is important for risk managers to be aware of alternative sources of recovery, Larry Mitchell, an attorney with Cotkin, Collins and Franscell in Los Angeles, CA, explained. "When it comes to insurance, you may want to ask whether you should put in a claim or not because it might impair insurability, risk cancellation, hike rates and premium," he explained.

While the courts are split on the issues, he said, private lawsuits abound. "People are suing as a result of pollution, property, bodily injury, emotional distress and Cancerphobia."

John Amore, vice president at the American Home Assurance Company, said some of the questions that arise from an insurance carrier's perspective are whether you can demonstrate control over expenses, physically and administratively. "It's important to see that there's an administrative effort by an organization to meet a growing number of environmental regulations," he said, adding that new coverages are being developed as regulations require. For instance, underground storage tank pollution liability is a new cover to help companies meet requirements from the new regulations pertaining to underground storage tanks.

But an expanding number of regulations is just one of areas that is changing, according to Lynne Miller, president of the Environmental Strategies Corp. Others are more state involvement, a new EPA administrator, and more clarity in federal regulation as well as a company's financial responsibility. Clarifications are expected to continue as with the Clean Air Act and Superfund reauthorizations and more land disposal restrictions.

PHOTO : Specialists share their expertise on a variety of pollution concerns; and risk manager

PHOTO : Dale Bitter presents strategies for environmental risks.
COPYRIGHT 1989 Risk Management Society Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Author:Oshins, Alice
Publication:Risk Management
Date:Jun 1, 1989
Previous Article:Managing risks East to West.
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