This is the edition where most people would say – Wow, 2024 is already half gone but I’m not going there! Let’s look at it like – Wow, we have an entire six months left in 2024 to do some extraordinary things!! I guess I just needed a little positive spin on how fast time is moving. Like Kenny Chesney says, “Don’t Blink”. Am I right?! Hopefully, you all have enjoyed the past six months and you found time to have fun, relax a bit and expand your business!
We found time to create a new issue of the RT ECP Standard, which highlights the latest regulations for PFAS or “forever chemicals”. In April of this year, the EPA unveiled new regulations aimed to control PFAS by setting a very low maximum contaminant level (MCL). Read on in this issue to learn more and reach out to your RT ECP consultant to discuss how your insureds may be impacted.
Also in this issue, RT ECP’s Daniela Compton provides an informative Risk Tip discussing limitations of liability and its effects on Contractors and Owners Protective Indemnity coverage. Check it out and reach out to Daniela with any questions.
Lastly, if you haven’t yet, I suggest you check out our News Center for information on accidents, catastrophes, claims and articles that support the need for both environmental and professional liability insurance.
I hope you enjoy this issue of our newsletter. As always, thank you for the opportunity to work with you and feel free to contact any of our RT ECP team members for additional information.
Regulatory Alert: PFAS Update
Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS) can be found in a wide range of everyday products and, after decades of use, have migrated into the groundwater supply ultimately contaminating our drinking water. On April 10, 2024, the U.S. EPA unveiled long-awaited regulations for PFAS in drinking water, aiming to control these "forever chemicals."
This groundbreaking regulation sets an enforceable maximum contaminant level (MCL) of 4 parts per trillion for Perfluorooctanoic acid (PFOA) and Perfluorooctane sulfonic acid (PFOS), two prominent PFAS varieties. The EPA also set enforceable MCLs of several prominent GenX Chemicals. The rule states that public water systems must complete initial monitoring for the chemicals within three years and inform the public of those results.
In addition, the EPA finalized its designation of PFOA and PFOS as hazardous substances under section 102(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). In doing so, the CERCLA designation gives the EPA enforcement power against responsible parties that manufactured PFAS as well as certain federal facilities and other industrial parties.
Wondering about the impact of this new regulation on your insureds? Rest assured, RT ECP is closely monitoring the response of the environmental insurance market and will keep you updated. In the meantime, there has been a proliferation of PFAS exclusions on Insureds' general liability policies. Contact your RT ECP consultant to discuss potential solutions with a Pollution Legal Liability insurance policy.
Optimizing Professional Protective Indemnity Coverage
Architects, engineers, and design professionals are often purchasing lower professional liability limits than necessary and this is likely due to the high cost. But engineering and design errors can lead to substantial damages in these disciplines. In his latest IRMI Expert Commentary titled "Optimizing Professional Protective Indemnity Coverage," Jeff Slivka, with contribution from Daniela Compton, discusses the importance of Professional Protective Indemnity as an alternative financing mechanism. Read the article here and reach out to Jeff or Daniela to discuss how this coverage may benefit your insureds.
Welcome to the Team - Chara, Jack, Chris, David
Please join us in welcoming our newest team members.
The RT ECP team spent the day in New York City on June 5th. We had a wonderful day including lunch, The Outsiders on Broadway, and a wonderful Italian dinner at Becco. Everyone had a fantastic time and we send a special thank you to all of our agents, brokers, and carriers for allowing us to enjoy the day.
RT ECP's Baby Boom Continues
RT ECP's baby boom continues with the birth of Wesley James Donaldson, son of AJ Donaldson. Please join us in wishing AJ and his family congratulations.
Risk Tip - Limitation of Liability and its Effects on Protective Indemnity Coverage
By: Daniela Compton
Many contractors hire design professionals and/or engineers on construction projects and purchase Protective Indemnity Coverage. Protective Indemnity coverage is a first-party coverage which would provide excess coverage to the Insured for damages the Insured is legally entitled to recover from the negligent design professional with whom they are under contract. Regarding this coverage, many times there are Limitation of Liability (LOL) provisions in a design professional’s contract which may cap/limit the amount of damages the Insured may recover from such design professional and ultimately reduce the total recovery under the protective indemnity coverage.
Let’s say the LOL provision in a contract is limited to $500,000, but an error made by the design professional results in $2,000,000 of damages to the insured. Depending on the jurisdiction and venue, the insured may not be able to pursue the design professional for more than $500,000 because the insured contractually agreed to limit the design professional’s liability to that level, even if the design professional has Professional Liability insurance of $1,000,000. This would leave the Insured responsible for the remaining $1,500,000 in damages.
Some carriers can provide protection for LOL provisions that may go unidentified by the insured on a blanket basis with a LOL endorsement. Under this endorsement the carrier provides a fixed attachment point, usually at $1,000,000. If the LOL is under $1,000,000, the insured would pay the delta between the LOL and $1,000,000 leaving the carrier to pay above the $1,000,000 and up to the total damages incurred. However, not all carriers are this accommodating and may not accept a LOL.
This is why it is important to carefully review the design professional or engineering firm’s contract for LOL provisions, and if there are or must be, make sure the LOL is acknowledged by the carrier, or set to an appropriate attachment point as determined between insured and carrier to be able to recover properly under the the protective indemnity coverage part.
Did You Know?
Valuable Resources on the RT ECP Website
Did you know that RT ECP's website contains valuable resources to assist in your sales process? Click the links below to check them out.
