By R. Ivy Riggs, CPCU, ASLI, AIS
For those who work in the insurance industry, evaluating worst-case scenarios may feel like nothing more than a daily mundane task. But because terrorist attacks have not yet become so frequent in this country that they feel routine, many of us have no first-hand familiarity with how to adequately address the consequences of such events with our clients. This is particularly true in cases of weighing site pollution exposures.
When we think of site pollution and terrorism risks, the tendency is to imagine high profile targets such as Disney World, the Golden Gate Bridge, Times Square, or the Mall of America. Unfortunately, the sad truth is that terrorists can strike any type of target, from the nearest office building to the popular restaurant down the street. So if a client repeats the familiar protest of “I-don’t-have-any-pollution-exposure,” the following three aspects of terrorism are useful to point out.
Pollution Releases from the Terrorist Act Itself
Property damage caused by deliberate violence can release numerous hazardous materials, including asbestos, fibrous glass, mercury, and lead. Depending on the target—especially those associated with oil extraction and refining, chemical manufacturing, or fertilizer distribution—there may also be deliberate releases of materials stored in bulk, with the intent of contaminating the environment as well as wasting important resources. Other types of threats may be mostly airborne in nature, such as chemical, biological, or radiological (CBR) attacks. These require specialized filtration and air cleaning responses that are likely to be both costly and complex, no matter the type or function of the building affected. Furthermore, although it is grim to contemplate, the loss of life associated with such events also requires cleanup efforts by those trained in remediating biohazards such as blood, bodily fluids, and human remains.
Pollution Caused by the Response to a Terrorist Attack
In an ongoing crisis situation, authorities may be forgiven for prioritizing the protection of human life over the preservation of property. Yet the fact remains that official responses can introduce new pollution hazards that will have to be addressed in the aftermath. Fires may be put out with water that results in water damage and later mold growth, or they might be fought with foams containing chemicals that contaminate site soils and groundwater. Hostage or siege situations may lead to the use of tear gas, the residues of which are notoriously difficult to remediate in confined spaces. Additionally, because numerous tear gas canisters may be fired into an occupied space, some may penetrate wall cavities without exploding. If cleanup is performed by untrained personnel, these hidden canisters can activate during cleanup and recontaminate the property.
Indirect Impacts of Pollution-Related Terrorism
Because both terrorist acts and the responses to them have widespread impacts throughout a community, it is important to consider how a client’s business may suffer even it if is fortunate enough to avoid the primary losses. Investigations and cleanups take time, during which large areas may be cordoned off, foot traffic forbidden, or utility services disabled. Such periods of business interruption may be catastrophic to any entrepreneur. Those especially hard hit include policyholders whose insurance will not respond because it was improperly structured, providing coverage for neither acts of terrorism nor for business interruption.
Even more vulnerable are those that have failed to purchase Site Pollution insurance at all. Often this product is viewed as a discretionary purchase and therefore among the first on the chopping block when funds are tight. But having the proper protection in place in times of crisis is necessary not just for all the hazards we can anticipate, but also for the unthinkable. For more information on Site Pollution coverage, please contact us.