No matter how prepared you might be, disasters still find ways to happen without warning. This is exactly why, if you are involved in construction or development projects, or your company handles sensitive chemicals, you should protect your business with a risk management program that includes pollution liability insurance.
Interestingly, insurance of any type is the one thing you buy with the hope of never having to use it - but when you do have to use it, you'll be so thankful you bought it. Insurance, after all, doesn't just help you deal with the immediate events occurring after a disaster, but also with the long-term consequences.
Take, for example, the recent West Virginia chemical spill on January 9. A Freedom Industries facility accidentally released MCHM through an inch-wide hole in one of its stainless steel storage tanks. The containment area failed to hold in the leakage which went on to spill into the Elk River, affecting the intake, treatment, and distribution center of West Virginia American Water. Because of the spill, nine counties and 300,000 residents were advised not to drink, cook with, wash with, or bathe in the tap water. People in the area had to find ways to cope, while establishments had to close down. It was only on January 13 -- four days after the incident -- that the "do not use" warning for the water started to be lifted.
There isn't much information on the effects of MCHM because it hasn't been extensively studied yet, but its manufacturer, Eastman Chemical Company, described it as an irritant on the skin, eyes, and respiratory system. It was also said to be "potentially harmful if ingested."
Because of the harm MCHM can cause, the media extensively covered the story and effected people (both individuals and businesses) filed multiple lawsuits against Freedom Industries.
Now, imagine yourself in the position of Freedom Industries, and imagine that you don't have pollution liability insurance. How will you protect your business from an onslaught of lawsuits? Where will you get legal help? How will you pay costly legal settlements? What will be the effect of negative media coverage on your company's reputation? How will you handle your corporate responsibility to the environment in the after-effects of an accident?
Pollution claims don't happen often because disasters don't happen every day. But all it takes is one accident to undo everything your business has established. And based on what happened to Freedom Industries, the cause of such an accident may be so small that you may miss it.
Pollution liability insurance will shield your business from financial loss in the face of a disaster. Paying premiums may be an added expense, but the protection such a policy offers is worth the money. In the end, consider it as an investment.