HomeMy WebLinkAbout104-Attachment C - ABAG Risk Management Best Practices � Risk Manager Email and Contractor Selection and Control.pdf
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From:James HillTo:Michael Taylor; Subject:RE: Pollution Legal Liability -SaratogaDate:Wednesday, March 09, 2011 12:10:55 PMAttachments:Contractor Selection -Construction Facilities and
Temporary.doc Hi Michael, I am always glad to be of assistance. Attached is a document that was taken from our website. This document can be used to support the position on environmental
insurance. It is located on the website (ABAG PLAN) under Resources...Risk Management Best Practices...Contractor Selection and Control. It is on the link just below the Best Practices
(form) link. The title of the document is Construction Facilities and Temporary Controls. This document outlines Risk Management practices and controls with respect to construction facilities
and site management. These practices are recommended to all members and we use to support our "Best Practices". There are several areas in the document that focus on managing environmental
exposure. Here are some highlights: 1.04 B3c. This area addresses Tree and Plant protection and specifically sites the prevention of dumping of refuse and chemically injurious materials
and liquids. This is an environmental exposure we want to avoid/manage. 1.04 B6. This area addresses soil removal (contaminated) during the performance of work. Another area of environmental
exposure, including transportation of contaminated materials and disposal thereof that we want to avoid/manage. 1.06 A4. This area addresses dust and dirt accumulation and storm drain
management. Storm drain management is an area of environmental exposure. There are several environmental advocacy groups that focus on Storm Drain management and suits have been raised
by these organizations on several occasions. Contracting activity is often monitored by these environmental groups. 1.06 C. This area addresses Pollution in general and given the inclusion
of this control point, it is clear that environmental risk is evident in most construction projects. The guideline states that each and every contractor must be in compliance with anti-pollution
ordinances and state/federal regulation. My final thoughts are related to the need for City Officials to recognize that the exposure exists and also recognize the fact that our PLAN
MOC does not respond to Environmental Claims. This alone should influence members that the degree of risk is not one that should be retained by the City. All environmental exposure is
"self insured" by each member and losses are severity driven (i.e. higher valued claims).
Damages, as defined in the MOC (Section 1.G5) do not include: Any monetary sum paid or awarded as or for any loss, cost or expense arising out of any: a. Request, demand, or order that
any Covered Party or others test for, monitor, clean up, remove, contain, treat, detoxify, or neutralize, or in any way respond to or assess the effects of Pollutants; or b. Claim or
suit by or on behalf of a government authority because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding
to or assessing the effects of Pollutants. I trust this helps. Please let me know if you need any additional information or advice... Jim Jim Hill, ARM-PRisk ManagerABAG PLAN Corporation(510)
464-7969 Phone(510) 464-7989 Fax>>> Michael Taylor <mtaylor@saratoga.ca.us> 3/8/2011 4:25 PM >>> Hi Jim. Thanks again for all of your help on the Pollution Legal Liability issue. My
final (?) question does ABAG have any requirement in writing regarding this coverage? Any recommendation (e.g. Best Practices) in writing that I can show my Mayor? Michael Taylor From:
James Hill [mailto:JimH@abag.ca.gov] Sent: Thursday, March 03, 2011 2:19 PM To: Michael Taylor Subject: Re: Pollution Legal Liability Michael,
It is good news to hear that things are moving forward on this engagement. When weighing the fact that environmental losses are not covered under ABAG PLAN, the exposure to the City
is such that Risk Transfer mechanisms (indemnification agreements and insurance) are the only viable option. You did the right thing to fully protect the interests of the City given
the nature of the engagement. Attached is a copy of a Contractor's Pollution Legal Liability Policy from XL Corporation. XL Corporation is an industry leader in providing environmental
insurance programs. Their contract is a good representation of how these types of insurance programs are structured and managed contractually. There are several types of Pollution Legal
Liability forms related to specific engagements (Professionals, Contractors, Environmental Remediation Firms, etc). I have attached the Contractor's form for your review. It is a claims
made version and there is an occurrence form available. The key to a claims made form is to ensure that an adequate "tail" provision is provided to address an event that may be identified
outside of the policy period, after the project is completed. XL's form covers the Job Site (project site), as well as the transportation and disposal of any pollutants (non-owned disposal
sites only). There is also a coverage part (Coverage B) for emergency remediation expense. The terms and conditions of the contract are relatively straight forward and this type of contract
would be suitable in terms of protecting the interest of Saratoga. As to the matter regarding limits of insurance; We generally require (or recommend) higher limits of insurance for
contracting engagements given the higher degree of exposure and potentially high property damage values. Our contractor insurance program calls for $5 million in coverage as an initial
point of reference. In my opinion, $2 million should be the "minimum" limits required for General Liability insurance, including pollution legal liability under any circumstances in
a contracting engagement of this nature. Please note that the sample contract only represents PLL coverage. There may be cases where PLL is imbedded (or endorsed) to a general liability
coverage form, so further review would be required in those "rare" instances (incidental exposure only; light contracting). This is an engagement that would require a stand alone, or
project specific PLL policy. Please over the attached contract and we can discuss any questions you have. Again, this is a typical contract and any contract issued by an acceptable insurer
(financial rating is very important with respect to this type of coverage) with similar type coverages would suffice in terms of meeting the insurance requirement(s). Jim
Jim Hill, ARM-PRisk ManagerABAG PLAN Corporation(510) 464-7969 Phone(510) 464-7989 Fax>>> Michael Taylor <mtaylor@saratoga.ca.us> 3/3/2011 7:50 AM >>>Good Morning Jim. Thanks for all
your help this week with my questions regarding Pollution Legal Liability. Council approved the development final map last night, but asked that I continue to research the environmental
coverage requirement. Does ABAG or Alliant have a copy of a PLL endorsement that I could have to see what is covered and what is exempt? Council is interested in limits ($2M per occurrence
or aggregate), term (through project completion, 10 years, or indefinite), and in what other cities require. The developer claims that this is the first project that has required pollution
coverage. Do other cities indemnify in the contract agreement? How did the PLL requirement get included in the contract (did ABAG recommend that as a best practice)? I need to go back
to Council next week with more information. I appreciate your continued assistance with this. Best Regards, Michael Taylor, City of SaratogaRecreation & Facilities Director, Risk Manager19655
Allendale AvenueSaratoga, CA 95070( (408) 868-1250 | 7 (408) 868-1279 | *mtaylor@saratoga.ca.us"Creating Community and Quality of Life -Parks Make Life Better" Did you know? The Saratoga
Recreation Department offers over 1,200 classes and programs, providing approximately 60,400 hours of service to about 4,925 individuals each year. PPlease consider the environment before
printing