Shipyard Resists Payments for Environmental Cleanup

ByJoseph O'Neill

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Updated onOctober 12, 2017

Shipyard Resists Payments for Environmental Cleanup

This environmental health case takes place in Louisiana and involves an insurance company who delayed its processing of claims. The plaintiff was the site of a large ship building facility. The shipbuilding operations resulted in environmental contamination of certain sites on the shipyard and ocean. The shipyard was closed after several decades of use, at which point a sizable portion of the land was granted to the surrounding township so the land could begin redeveloping for civilian, residential, and commercial uses. The shipyard and the city entered into an environmental services cooperative agreement, pursuant to which the shipyard agreed to pay for, and the city agreed to perform, environmental remediation. The plaintiffs entered into a contract with a construction company that required them to remediate all known pollution conditions. In order to protect themselves the construction company obtained an insurance program from the defendant that included two simultaneously issued manuscript policies: one known as a Remediation Stop Loss insurance policy, and the other known as an Environmental Liability Insurance policy, The RSL policy was designed to protect against the risk of increased cost in work remediating known pollution conditions. The RSL policy also provided, that the defendant would adjust claims made under the policy in a timely manner so as to prevent delays or interruptions in the construction company’s performance. The ELI policy was designed to protect against the risk that the navy site contained pollution conditions that were unknown, and therefore not within the scope of work paid for as a part of the guarantee and insured under the RSL. The ELI policy indicated that the defendant would pay the plaintiffs for the cost of cleanup required by governmental authorities for unknown pollution conditions discovered on site during the policy period. When the RSL policy and the ELI policy were issued, it was the intent that these policies would provide a comprehensive program of insurance against costs incurred above and beyond the Guaranteed Fixed Price Contract price for cleaning up pollution on site and that, subject to all of the terms of the policies, if a claim for pollution cleanup was not covered under one of these policies it would be covered under the other. The plaintiff alleges that the defendant deliberately delayed the processing of claims that the construction company made under the RSL policy. They also claim the defendants refused to pay expenses that the construction company had claimed under the RSL policy for cleanup of lead pollution at the site.

Question(s) For Expert Witness

1. Do you have at least 15 years of hands-on experience in environmental claims handling?

2. Explain your experience and knowledge in environmental cleanup coverage?

3. Explain you knowledge of insurance bad faith?

Expert Witness Response E-009358

inline imageI am very familiar with this location and have been following the story for a number of years given its relevancy to my profession and location. I have plenty of hands-on experience in environmental claims handling, mostly at AIG Environmental as a national and regional director. Environmental cleanup coverage is my specialty, and I have been involved in the field from a number of perspectives including risk, assessment, underwriting, and policy management. Knowledge of insurance bad faith is necessary in my line of work and I am familiar with it as it relates to environmental claims.

About the author

Joseph O'Neill

Joseph O'Neill

Joe has extensive experience in online journalism and technical writing across a range of legal topics, including personal injury, meidcal malpractice, mass torts, consumer litigation, commercial litigation, and more. Joe spent close to six years working at Expert Institute, finishing up his role here as Director of Marketing. He has considerable knowledge across an array of legal topics pertaining to expert witnesses. Currently, Joe servces as Owner and Demand Generation Consultant at LightSail Consulting.

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