Fire: Environmental exposures and risk management

A catastrophic structure fire is a peril of great concern to any risk manager. In addition to the potential for loss of life, it often results in a stress test of the effectiveness of an entire enterprise risk management program. Business interruption impacts can be severe even when business continuity and disaster recovery plans are implemented. Multiple insurance claims may need to be resolved and insurance providers may need time to sort them out.

Every business has some form of environmental exposure and a fire just increases the potential for incurring environmental liabilities. A fire or explosion can trigger claims for environmental remediation, bodily injury, property damage, and business interruption both on- and off-site under a pollution liability insurance policy. Legal costs can also quickly escalate when third party claims are involved or when disputes arise over responsibility/liability. Large industrial fires also have the potential to cause natural resource damages that can result in additional fines and penalties.

As a part of any sound risk management program, risk managers should consider obtaining a pollution liability insurance policy to help their business overcome fire incidents and associated environmental impacts.

This whitepaper focuses on the environmental exposures arising from fires and how businesses can mitigate the risks associated with environmental liability.

Topics covered include:
• Recent high-profile fire impacts.
• Fire types and sources.
• Environmental impacts.
• Risk identification and mitigation techniques.
• Fire and pollution liability claim examples.