Today’s webinar will focus on how businesses can leverage historical general liability insurance policies to pay for environmental cleanup costs.

With that, I’d like to introduce our presenters for today.

We are pleased to have with us Ben Pariser, Principal at Restorical Research LLC.

Ben brings over 20 years of experience in the real estate construction and development fields to each project.

He began working in the construction industry at a young age, building his first house while in high school.

He went on to develop and construct single-family and multi-family master plans communities, as well as commercial, retail, office, hotel, and private utility projects that spanned four states and 12 municipalities.

He has experience across the spectrum from managing teams of subcontractors to negotiating acquisitions, executing contracts, and coordinating the build out of multi-million dollar developments.

We are also pleased to have with us today Keith Munsey, Northwest Technical Manager at Regenesis.

Keith Munsey has worked in the environmental remediation research and consulting industries for over 11 years.

He supports groundwater and soil remediation projects in the Western US and Canada, and focuses on sites with chlorinated solvent, PFAS, and petroleum hydrocarbon impacts.

Keith Munsey has project management, compliance reporting, and analytical experience throughout the United States and in Central America.

Prior to Regenesis, Keith worked in environmental consulting for three years, and prior to that spent four years with the Florida Department of Environmental Protection.

All right, that concludes our introduction, so now I will hand things over to Ben Pariser to get us started.

If your site has contamination and it’s going to cost millions of dollars to clean up, you don’t have to pay for that.

Historical States our clients millions of dollars each year and in this presentation I’m going to explain how and by the way, we only get paid if we’re successful.

We like to refer to insurance policies as hidden assets this client inherited this property along with the dry cleaner that have been there for 60 years, leaving behind a tremendous amount of contamination.

Insurance paid over four million dollars to clean this site up and that includes the Regenesis product that helped achieve an NFA.

I’m going to explain this over the next few minutes.

First, I was like a B student in college. I did not get a law degree. I am not an attorney.

I’m not your attorney and I’m happy to validate any parking if that’s necessary.

What are we talking about here.

We’re talking about if your contamination is old, you want to use an old insurance policy.

Industrial and commercial cleanup that are very expensive and very complex can be paid for with insurance policies that are 50, 60, 70 years old.

This is one of our clients and this is a batch plant producing asphalt and concrete going back to the 1930s.

Our client purchased the business in the 1980s through a stock purchase and when they did that they acquired all of the historical insurance policies of the prior business.

We helped them use those policies to recover the money they spent cleaning this site up over two million dollars nearly seven years after they finished cleanup.

PFOS was developed in the 50s and it found its use in applications at places like airports and throughout firefighting industry.

Throughout the 60s and the 70s, AFFF and other PFOS components found itself being used throughout the United States.

Nowadays, we’re finding PFAS for the first time in many places, but this PFAS is not new.

It is old.

It may not sound correct that you can use an old policy to find a contaminant that you just discovered, but I’m going to explain exactly how this works.

In the 1930s, the insurance industry had a problem.

Business owners, property owners, didn’t buy a lot of insurance.

It was expensive and it was time consuming.

If you were a property owner and you wanted to protect yourself from a liability, you had to know what that liability was and you had to get the insurance broker out to your property.

And you would say to the insurance broker, I would like to protect my property from wind damage this year.

The insurance broker would then write a manuscript policy that protected you for one year from that one liability, wind damage.

And what usually would happen is you would have no wind damage that year, but something else would happen, a different liability.

Someone would slip on your property and sue you because they broke their leg and you had to pay for that and it wasn’t covered by insurance.

So property owners did not buy insurance from insurance companies and insurance companies were not selling insurance and they were losing a lot of money.

So the insurance industry thought about this throughout the 30s, and they decided in the 40s that they were going to change that.

It’s important at this point to understand that insurance policies are contracts.

The contract says that the insurance company is going to provide protection or compensation for losses, and in exchange for that, the policyholder is going to pay the insurance company for that protection, and that’s in the form of premiums.

Why am I making it a point to tell you this?

I’m making it a point because the insurance industry created the general liability policy in the 1940s, and that policy, it was a contract, and that contract took specific care to make sure that it would provide broad coverage for unforeseen events.

The carriers made these policies, these contract occurrence policies, which meant that if you had a liability that occurred during the policy period but did not discover that liability for 1 to 15, 30, 40 years in the future, you could go back to the policy period and you could tender a successful claim.

And they sold these policies like hotcakes to property owners throughout the United States.

This is a 1943 Maryland casualty advertisement called the boomerang, and it literally said in the advertisement as a header, unforeseen events need not change in shape the course of man’s affairs.

These policies were affordable, they provided a tremendous amount of coverage, and property owners throughout the United States purchased these policies.

Governmental property owners, private property owners, all the same.

This is why the policies were developed by the insurance company, this is how the insurance company advertised their sale, and again this is a contract which is going to come back and be very important.

In 1969 the Cuyahoga River in Ohio says hold my beer and it lights on fire for the 13th time in 80 years.

The picture on left and the picture in the middle are for the fire that occurred in the summer of 1969. This fire didn’t cause a lot of damage.

It was put out in 30 minutes but it was featured in a Time magazine article about a month later.

The Time magazine article went into great care to explain that this river catches on fire every so often and it’s because the petrochemical companies upriver are dumping their contaminant into the river indiscriminately because there’s no laws to protect the environment.

On the right-hand side is a political cartoon from four years earlier, from the Cuyahoga High Plains dealer, sorry, from the Cleveland High Plains dealer, and it is showing what everybody knows, the open secret that this waste product from the petrochemical companies is just ending up into the river.

This was taken up into the nightly news, and the American public was outraged.

Four months later, Richard Nixon becomes our first green president, and he writes into the law legislation that creates the EPA.

The EPA then empowers the states throughout the United States.

In this presentation, we’re focusing on Washington, Oregon, and California.

But every state in the United States developed their own state agency.

Those state agencies relied on the federal government for their charter.

And those state agencies and the federal government sent out tender letters requesting that property owners clean up their contamination.

And they sent it to the Fortune 5000 property owners across America.

They said, we don’t care about the contamination that We do care about the contamination on the site that you own right now, and we also care about the contamination on the site that you sold 5, 10, 15 years ago.

Clean this up. These large corporate interests, some of them are shown on this slide, they went to their attorneys and they said, get us out of this.

The attorneys said, hey, the same policies that we to protect us from unforeseen events like slip and falls they don’t have a pollution exclusion this is an unforeseen event unforeseen liability let’s go tender these claims and what did the insurance companies do they denied coverage what did the businesses do in return they sued the insurance companies that’s early 1970 by the year 1970 is out in every single state the Supreme Court of that state heard these arguments and in every single state they ruled against the insurance company.

And you can use a pre 1970 general liability policy in every single state in the United States to some degree.

What happened?

The result was the insurance companies freaked out.

And so what they did is they decided they were going to create the very first pollution exclusion.

This is the qualified pollution exclusion and it basically says in a hundred words or less, we don’t care where the pollution comes from, we don’t care where it’s going, we’re not paying for anything, and then it says but.

This exclusion does not apply such discharge, dispersal, release, or escape as sudden and accidental. Some of you may remember conjunction function, not this, but that.

I’ll give it to you the way that this really comes home for me.

I have a 14-year-old daughter when she was 9 years old she came home from school she said dad do you know that when you say but it means everything before that is a negative I said I don’t know what you’re talking about she said when you told me you liked my dress but I know that you actually don’t like my dress and besides me realizing that she’s smarter than me she made a lot of sense and that’s exactly what this exclusion is saying ignore everything before but and look at last sentence here this exclusion does not apply such discharge dispersal release or escape is sudden accidental the word sudden the word accidental is highlighted and we’ll talk about that in a minute so what happened the carriers are getting nervous about that exclusion about the word but about the fact that sudden and accidental are not defined in the policy and Remember, the policy is a contract.

The contract was constructed and authored by the insurance companies.

So when there’s ambiguities in that contract, they go against the author of the contract.

In 1985, while we were thinking, we are the world, the insurance industry came out with a new pollution exclusion, and they referred to that exclusion as the absolute pollution exclusion, APE, and they took out the qualified pollution exclusion, and they put in the absolute pollution exclusion in April of 1985.

This exclusion had all of its terms defined and was much narrower in scope.

In most states, in 48 states out of the United States, this exclusion holds water.

In New Mexico and Indiana, this exclusion doesn’t hold water.

And if you’re in those states and you’re paying for contamination, you should look to not pay for the contamination.

You can use policies in the last 10 years to fund your cleanup.

From the 1990s through the 2010s and still to this day a little bit, in Washington and Oregon and in California, these large corporations with a lot to lose because of contamination sued their insurance companies about the words sudden and accidental and but in that qualified pollution exclusion.

And they were very successful in Washington and Oregon.

They won just about every case.

The laws in Washington, Oregon are some of the best laws in the United States for using these old insurance policies as a policyholder.

And that is because Washington and Oregon are industrial manufacturing states.

Warehouser, Paccar, Boeing, Schnitzer, Zydell, these companies had the money to wear with all and the clout to do these insurance companies and be very successful.

In California, it’s a much more diversified economy, and so they were successful partly but not wholly.

So the best states are Washington and Oregon, but you can still use these policies successfully in California.

And the bottom line is you don’t have to litigate these claims because these large corporate interests already litigated these claims and each of these states have laws at the Supreme Court level which tell you how you can use these policies successfully.

So again here’s a quick graphic.

I threw Idaho in there because Idaho is a very bad place to use these old policies because there are not a lot of laws at the Supreme Court level in Idaho. Collateralizing insurance.

Our client is a developer in the bottom right.

They built that building after they purchased the dry cleaner at the top.

They purchased that dry cleaner which began operations in the 1950s.

They bought it in 2018 and then we went out and we found the insurance policies not from the seller and not from the prior owner but from the prior prior owner in the 1970s and 1980s.

We helped our client, the buyer, collateralize the insurance and then insurance paid over six million dollars to get that dry cleaner cleaned up and build this beautiful building.

And this graphic explaining how that happened.

In 1950, the dry cleaner started operation and because of the nature of dry cleaners and because of the nature of gas stations, because of the nature of how things like PFAS was applied, they were unintentionally polluting the groundwater.

That’s what the dry cleaner was doing. They had no intention of causing contamination.

They didn’t know what they were doing was harmful.

This is the standard business practice to go out the back door and dump their trays at the end of the day.

Just like it was a standard practice to use AFFF in fire exercises.

Just like it was a standard practice to put, you know, contaminated materials into an unlined landfill. So here you have a dry cleaner that began in the 50s.

It’s in operation every single day.

The contamination is occurring and it’s and migrating. We found the policies from 1979 to 1983.

Those policies were in place as the contamination occurred.

And if you remember back to the boomerang example, they are paying for unforeseen liability.

This is an unforeseen liability and this is how you show that the contamination occurred during the period.

Fast forwarding to 2018, we helped our client, the buyer, go back and find these policies and make them available so you can have coverage.

And again, there is nothing extraordinary about these policies.

This is exactly what the policies were written for by the insurance company.

This is exactly why businesses purchased these policies.

Businesses that had landfills and auto airports, fire stations, universities, so on and so forth. How do you do that?

How does it work? You do it through an assignment of claim.

If you’ve ever had a broken windshield and you’ve brought it to the car dealership to replace your windshield, you’ve had someone ask you, would you like to run this through your insurance carrier? And most of the time you say yes.

When you say yes, the auto dealership hands you a document which you sign and if you read that document you would read that what you are doing is you are assigning your car insurance over to, you’re signing the claim of your broken windshield to the car dealership and you’re naming the car dealership as your agent to pursue your car insurance and that’s exactly what they do.

They tender this broken windshield claim to your insurance company with the authority that you’ve given them and they are able to receive money from the insurance company and in exchange they replace your windshield and that is exactly what we do on contaminated sites.

You cannot in most cases assign insurance so when someone yells at you or says that you know the guy you heard on the webinar wasn’t speaking the truth you can say fine it’s not an assignment of an insurance policy, it’s an assignment of the claim and this you can do for historical helps our clients do this on a daily basis. It is very successful.

Landfills are a major source of contamination and we’re now finding out this is a major source for PFAS.

All of these landfills before 1970 and certainly in some states before 1985 purchased this insurance either through the city’s insurance policies or the county’s insurance policies, sometimes the state’s insurance policies.

You’re gonna hear, well, we’ve always been self-insured.

Very rarely have these agencies, these governmental entities been self-insured all the way back through the 40s.

And if they were self-insured, they might’ve had a self-insured retentive and then they went out and they purchased an umbrella policy on the commercial market.

At Restorical, we’ve had great success helping governmental entities find these policies, which are not part of risk cooperative and helping them use these commercial policies to clean up landfills that were closed down 40, 50 years ago.

Right about now, you want to see a cute puppy.

I understand this is a conversation that’s a little bit deep, but let me assure you, it is worth your time and we’re almost done.

The benefits of these pre-85 insurance policies are that they do not expire, there is no statute limitation, most of them do not have a deductible, you can use them functionally for funding and recovery, and in our belief, you can do this without litigation if it’s done correctly.

These are all of the drawbacks to using a Pre-85 insurance policy.

Seriously, though, there’s no reason why you shouldn’t use a Pre-85 insurance policy to you on your contaminated site.

You may hear something that would preclude you from using these old insurance policies, and we’d like to think of these as myths.

Again, there’s no statute of limitations.

Going back to the contract, they made these contracts so that if you could show that the pollution occurred during the policy period, the insurance company is supposed to come and protect you from that liability.

There’s no deductible, there’s no increase in premiums, and for whatever the reason that your brother-in-law says that this isn’t going to work, have your brother-in-law give me a call. I’d be happy to talk to him.

We do this all the time. What makes our company different?

We are a sole source provider of our services. There’s no other company that does what we do. We have no conflict.

Number one, we do not work for insurance companies.

There’s no other firm that can stay that. There’s no risk.

Our fee is tied to our success and we unlock the an asset.

We are going to work with our clients from the beginning, finding these policies, developing strategies to use these policies, working with their legal counsel, managing the claim.

Once the tender has been successful and funding has been provided, we have an in-house accounting team that will make sure the monies are going to the right place and your site is cleaned up. We use this proven process on all of our projects and very high value right here.

Task one is where we go out and we find these policies and put together the strategy.

We can usually do this in about four months. We charge a nominal fee.

If you decide that you want to move forward after we give you a yes, we will work with your legal counsel and then we will work on a contingency fee until coverage has been obtained and we have your site being funded or paid back or sold or purchased.

This is a quote from Miles, he owns a large car dealership in Washington.

He was very skeptical too.

And we were able to recover $1.5 million for Miles.

Thanks, Ben, for the detailed information on how funding resources can be uncovered with the historical.

Once funds become uncovered, it’s important to understand what options are available to meet your goals. My name is Keith Munsey, as Dane mentioned.

I’m the Pacific Northwest District Technical Manager with Regenesis, and I want to briefly talk to you about cost-effective and time-sensitive remediation methods.

Regenesis offers a range of remediation technologies that can be used efficiently and effectively to treat a range of contaminated sites, including impacts from petroleum hydrocarbons, chlorinated solvents, and PFAS.

Regenesis technologies have been successfully implemented at 40 ,000 sites worldwide, at such sites as brownfields, redevelopments, airports, gas stations, and manufacturing facilities.

Of the projects Regenesis has worked on, over 25 sites in California, Washington, and Oregon have had legacy insurance policies uncovered to fund cleanup efforts with the help of Restorical.

Thanks to over two decades of research and development And in field testing, Regenesis offers several different remediation technologies to provide different pathways for contaminated soil and groundwater remediation, such as in-situ chemical reduction, in-situ chemical oxidation, both anaerobic, anaerobic biodegradation, and in-situ sorption using colloidal activated carbon.

Depending on the level of contamination, there is typically more than one approach or combination of technologies to treat a contaminated site to reach site-specific goals.

Regenesis technologies are engineered to be injected easily into the subsurface under low-pressure conditions.

The goal with these injections is to create an interlocking radii of influence with the ejection points, most commonly in a grid and pattern to treat source mass or as a permeable reactive barrier to intercept contaminant mass as it flows through the barrier, preventing off-site migration and or increasing the residence time of contaminants in the treatment zone.

Once the site has been identified, the next step would be using the existing site conceptual model to understanding site lithology, groundwater flow characteristics, and containment pathways to develop remediation designs using remediation technologies.

Understanding the site’s specific additions is one part of the equation, but another part is understanding the cleanup criteria or the cleanup goals.

The different technologies can be used to treat the same site with a range of different levels of aggressiveness.

So let’s look at it as an example, as it pertains to a site impacted by chlorinated solvents.

A site impacted by PCE can be treated with different alternatives, depending on how strict the cleanup criteria is.

So for this hypothetical scenario, PCE is located underneath a formal dry cleaning facility.

And in the first scenario, the goal is to use an existing budget to make some positive impacts on the groundwater conditions.

and the focus is to use a small portion of the allocated funds to clean up the impacts and timing is not critical.

In this scenario, using a multi-stage release electron donor and a bacteria consortia would promote reductive dechlorination effectively for a long period of time at a relatively low cost.

In the other scenario, not only does the landowner want to expedite the cleanup timeframes, but they would also like to eliminate all containment migration off-site and reduce daughter product formation.

So here, we can use a colloidal activated carbon barrier, or plume stop, to be installed downgrading of the source zone to provide a high level of contaminant protection of off-site migration.

And sulfidated micron scale zero-valent iron can be added in the source area to enhance productive dechlorination and also provide a pathway for abiotic destruction by bypassing daughter product formation.

Due to the varying levels of aggressiveness, costs can vary, but this is important because understanding your site-specific goals and budgets can help make sure that you’re getting the most appropriate remedial action that aligns with the site’s goals and insurance thresholds.

During Ben’s talk, we heard about the need to uncover funds for PFAS-impacted sites.

And as we continue to discover more PFAS impacts nationwide, understanding where the funds are coming from to treat these impacts will continue to be a major question in the industry.

There’s an estimated 50 ,000 PFAS sites in the US that require remediation, and approximately 100 PFAS sites worldwide that have begun that process, with over 70 doing so with in-situ methods.

The leading method for in-situ treatment is using colloidal activated carbon or PlumeStop

PlumeStop is milled down to one to two microns in size and suspended in a polymer to enhance distribution in the subsurface using low-pressure injections.

Plum Stop can be applied to treat chlorinated solvents and PFAS compounds by converting the underlying aquifer into a purifying filter.

There have been a number of third-party assessments into the effectiveness and longevity of a chloral-activated carbon treatment.

In this specific study from Grant Carey, he reviews 17 PFAS sites treated with Plum Stop with data ranging from four months to about six years and showing 90 to 99 percent reductions and 16 of the sites even with co-contaminants present.

Using derived Freudlich isotherms for key PFAS species, he modeled longevity of the barriers, which showed between 66 to over 200 years of performance, depending on the dosing of the barrier.

This paper also highlights that reducing the incoming mass of, reducing the incoming flux of contamination by controlling the source area can significantly extend a barrier’s lifetime.

Regenesis offers SoarStop, which is a highly concentrated solution of colloidal and powdered activated carbon that can be injected into the source area at the capillary fringe or into the vadose zone to significantly reduce the leachability of the source material.

Other methods of PFAS remediation that focus on ex situ extraction rely on bringing the contaminants to the surface, which in many cases involves disposal and transport, which It can not only be costly, but also challenging to find a facility to accept that waste.

But it can be also a way to introduce potential contaminants throughout the transportation cycle that can increase circular liability.

This would also increase its potential to have impacts to human health.

And with in situ methods, there is no initial or ongoing waste generation to spread that liability, and there’s really just a small temporary footprint during the initial process.

There are numerous pump-and-treat sites nationwide that have been in operation for decades with no cleanup end date.

These systems are costly and require ongoing maintenance and operation and power supply.

In-situ applications have a relatively short infrastructure footprint and can be designed be a one-time injection, while also coming in at a fraction of the cost.

This paper by Jeremy Bernstiegel compares the cost of two PFAS remediation methods at Worsemis Airport Base.

Pump and Treat and both in-situ CO2-activated carbon barriers were analyzed here with a barrier option coming in at roughly 62% less over the 30-year lifespan of the total project cycle as compared to pump and treat.

These barriers are designed to passively trap PFAS underground with minimal maintenance, while pump and treat requires the continuous ongoing operation and generates waste.

Here are three other sites where cleanup costs have also been evaluated.

We have an airport in the UK and a fire training facility in the Midwest with both savings estimated at about one third the overall project cost for PFAS treatment.

The third example is from a high-mass chlorinated solvent plume in Nevada.

Worth noting here that at this location, the cost savings here is about 50% at the time of injection, because this calculation is assuming the cost of the expansion and the continuing O &M of an existing system, and not actually including the initial installation of the pump-and-treat system.

So overall, project costs could look a little bit different with that initial system setup calculated.

Not only is cost associated with in-situ generally much cheaper than ex-situ methods, it also leads to more rapid cleanup timeframes.

This is due to contaminant mass that sorbs into the low permeability zones and then back diffuses into the plume over time.

Extraction systems are required to purge thousands of volumes of water from the aquifer in order to flush those contaminants out of the system to reach that cleanup criteria.

This study here shows key PFAS species needing at least three years to reach their cleanup timeframe.

When designing in situ remediation plans, regensis accounts for both back diffusion and contaminant mass flux, and those values are incorporated into the design process allowing for site-specific dosing calculations.

So some key takeaways here are resources like Restorable can uncover available insurance policies to fund remediation.

Regenesis technologies can provide remediation plans specific to your site’s goals, budget, and timeline.

In situ remediation requires a small temporary footprint and does not generate waste over the project lifespan.

And Regenesis colloidal technologies can expedite cleanup timeframes and greatly reduce project costs compared to other remediation alternatives.