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Whether it’s a manufacturer or a construction firm, the response to the environmental risk profile question is nearly always the same, “What’s that?” While this is not totally surprising, it is still dumbfounding how organizations can purchase environmental insurance without thoroughly assessing their environmental risks. Here are some simple first steps that will assist business owners and insurance brokers to create profiles that will help them better understand and manage environmental risks.

Anyone who operates a chemical, petrochemical or bulk petroleum terminal facility has likely encountered a natural resource damages (NRD) claim. But since NRD claims have historically only been assessed after a catastrophic environmental contamination event, such as the 1989 Exxon Valdez disaster, many risk professionals may not have had any experience with them at all. This may be about to change, however, with many now referring to natural damages as a "sleeping giant" due to the potential lor vast recoveries under a host of federal and state laws. Before moving onto a more detailed discussion of this type of claim, first, it is is important to ensure we understand the necessary language.

Even though the professional liability marketplace has expanded somewhat over the past few years, and in 2008 we will definitely see rate decreases, most of this news resides with practice or corporate programs. When it comes to insuring professional liability on a project-specific basis, construction project owners still have few alternatives.

When managing the environmental liability of a construction project, the direction tends to focus on pollution conditions resulting from project activities, errors and/or omissions of the general contractor, subcontractors or the architect and engineer. Environmental claims, however, can also arise from other scenarios such as the discovery of unknown pre-existing conditions at a site being redeveloped, or from third parties alleging bodily injury and/or property damage. These third parties could be tenants in a building undergoing renovation or from neighboring property owners living or working adjacent to a Brownfield site.