Question on Removal of Debris
I was asked this question on removal of debris during the week.
I am just looking for some advice. We have a client who are manufacturer, fill and distribute spray paint cans and the like. The largest asset value per location is $12,000,000 at Wacol, an industrial suburb [in Brisbane Australia], and we have the ROD [removal of debris] set at $1,000,000.
We have discussed this with client today and I suggested we seek guidance from yourself. Can you please advise if you believe this limit to be adequate, or should we be considering a higher limit due to increased dumping costs of the product?
My response was as follows:
The Industrial Special Risks Policy covers the clean-up at the Situation and the premises, roadways, waterways, parks, rail lines etc. in the vicinity that are affected by the debris. The exact wording from the Mark IV version reads:
“Subject to the liability of the Insurer(s) not being increased beyond the Limit(s) of Liability already stated herein, the Insurer(s) will also indemnify the Insured for:…
(f) Costs and expenses necessarily and reasonably incurred in respect of:…
(ii) the lnsured’s legal liability in respect of removal, storage and/or disposal of debris, notwithstanding Excluded Peril 8 [the general exclusion for legal liability] in relation to premises, roadways, services, railway or waterways of others, consequent upon damage to the Property Insured by a peril hereby insured against for such costs together with the cost of cleaning provided that such liability was not assumed by the Insured under an agreement entered into after the commencement of the Period of Insurance or any renewal thereof unless liability would have attached in the absence of such agreement.
It is important to understand that this coverage insurance under this section does not extend to any liability that the Insured may incur as a consequence of pollution of any kind.
In the last pressure pack paint company I did a few years ago, the final cost for Removal of Debris was $1.6 million because of the contamination of nearby waterways. This is the big exposure.
I do not know how much stock is involved or what would be affected but I would be doubling the current figure and perhaps even going to $2.5 or $3 million to be safe. The Environment Protection Authority are getting stricter and costs have escalated since the claim to which I am referring. It may well be prudent to obtain a quotation and or advice from a specialist demolition contractor who can look at the exposure at this site and give you a more accurate figure.
Hope this helps.