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Should Carriers Be Concerned About Reduced Facility O&M Attributed to COVID-19?

Posted on April 01, 2020

Insurance Carrier Concerns Related to Reduced O&M Attributed to COVID-19

Although many states have recognized that remediation is considered “essential” and activities are allowed to continue during the COVID-19 Shelter-in-Place protocols, questions have arisen regarding the level of operations and maintenance (O&M) conducted at landfills, ash ponds, mines, hydraulic barrier systems for prohibiting impacted groundwater migration, the petroleum industry with numerous tanks and piping systems throughout the US, and manufacturers containing tanks and piping. With the Shelter-in-Place protocols and/or businesses reducing staff for social distancing requirements and illnesses, deficiencies in the general oversight to provide compliance activities are likely to occur. Deficient compliance of these noted systems/structures could increase the probability/frequency and overall severity of a release. Therefore, there will be an increase in the risk profile of a previously evaluated insured risk used to bind a policy, and claims would allow an insurer to take additional steps to mitigate these increases in risk.

Additionally, the USEPA issued a March 26, 2020 Memorandum, regarding COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program, which provides their thoughts and expectations regarding compliance for ongoing environmental actions. The requirements of the Memorandum are temporary and conditional, and may be reviewed in the link above.

Are you an insurance carrier that may have concerns regarding your insureds who are required to conduct O&M where their in-place policy risk profile could have changed? Roux can provide a low-cost, high-valued evaluation through a Telephone Survey or Desktop Review to provide a current understanding of the insured’s risk profile. To reach out to one of our experts, please fill out the form below:

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