Acknowledgement to XL Environmental
The construction manager of a construction, renovation and expansion project for a food distribution center hired an XL insured to construct and install a new refrigeration system at the facility. Our insured was in the process of cutting a section of pipe when approximately 50 pounds of ammonia was released as a gaseous cloud inside the facility. It took over an hour to contain the release and four workers and two medical technicians were hospitalized.
XL quickly responded with a defense for our contractor. Coverage was available under the pollution liability coverage part of the combined pollution and professional liability form. It was also determined that there was $100,000 of pollution coverage available in their general liability policy. Additionally, the claim investigation revealed that the facility owner was not a “passive” observer as originally reported since his “refrigeration expert” provided guidance and advice during the line cutting operation.
XL was able to facilitate a reduction in the initial demand based on the facility owner refrigeration expert’s involvement. The general liability carrier paid their $100,000 pollution limit; however, that was not nearly enough to cover resulting damages. The XL Contractor’s Pollution Legal Liability Policy covered the remaining damages, paying in excess of $250,000.