Many Queens Chamber of Commerce (QCC) members, as well as manufacturers, distributors and their insurance brokers, are unaware that there is a relatively new “combined form” policy specifically tailored to the needs of this class of business, which saves premium costs and provides enhanced coverage.
The following conversation is between Howard Tollin, president of Sterling Environmental and Professional Services and executive vice president of SterlingRisk, Frank Piccininni, senior attorney and account executive of Sterling Environmental and Professional Services, and Brett Swanson, manager of Committee Development and Member Engagement for QCC
SWANSON: What is a “combined form” policy?
TOLLIN: One policy form that combines the most comprehensive general liability, products liability, products pollution liability, site pollution liability and contractor’s pollution liability.
SWANSON: Why is the premium lower?
PICCININNI: With favorable loss runs, the rate charged for general liability exposures is lower than the typical rates used for commercial, retail and construction risks where claims tend to be more frequent. Moreover, the premium is not auditable, which means a growing company only pays the premium based on the prior year’s revenue with no audits.
SWANSON: Where else is there savings?
TOLLIN: The lower general liability rate and premium leads to a lower umbrella premium. In addition, the insurers who write the combined form also offer the most aggressive property, automobile, and workers compensation premiums as a coordinated program underwrite, which can really result in significant insurance costs savings.
SWANSON: What is excluded under present insurance?
PICCININNI: All general liability, property and directors and officers policies have an absolute pollution exclusion, asbestos exclusion, lead exclusion, silica exclusion, and either offer limited or no coverage for mold and environmental releases subsequent to a fire loss.
SWANSON: What is the effect of having that absolute pollution exclusion in the general liability policy?
TOLLIN: There is no defense costs, litigation costs, settlement or judgment costs, or business interruption recovery if the environmental claim is excluded. New York courts have consistently upheld denials of coverage from carriers since the 1986 Absolute Pollution Exclusion became part of the standard coverage.
Indeed, all irritants and contaminants which would be excluded from typical general liability policies are intended to be covered under an environmental cover only, including: acid, adhesive, ammonia, arsenic, asbestos, benzene, brine, carbon monoxide, caulk fumes, carpet glue, chlorine, chromium, cooking oil, contaminated drinking water, DT, diesel fumes, dioxins, dust, E. coli, fertilizer, foundry sand, fuel and gasoline, general fumes, heating oil, hydrogen sulfide gas, lead, manganese, manure, mercury, methane gas, methyl parathion, methyl chloride, microbial allergens, mold, MRSA, nitrogen dioxide, PCE, PCBs, pesticides, phenol gas, PVC dust, radioactive material, saltwater, sealant fumes, sediments, sewage, silica dust, smoke, water contamination and welding fumes.