Canadian Underwriter

Claims adjusters can leverage insurers’ ability to pay to take control of environmental clean-ups

October 16, 2009   by Canadian Underwriter

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Insurance claims adjusters can leverage their expert knowledge, as well as their insurance companies’ ability to pay for large-scale clean-up operations, to exert control over complicated environmental damage claims that typically span multiple jurisdictions.
Panelists John Cherrie of Cherrie Griffith Professional Insurance Services and Douglas Hallett of the Hallett and Environmental and Technology Group Inc. both shared stories of being called in to handle several high-profile environmental claims.
They spoke at the ‘Environmental Risks’ seminar organized by The ARC Group Canada, and held at the St. Andrews Club in Toronto.
Following their presentation, Cherrie and Hallet were asked how to “take control” of a chaotic situation early, especially when an environmental crisis typically involves multiple governmental departments, agencies and/or jurisdictions.
For one thing, Hallett suggested, claims adjusters will be viewed as natural leaders because their knowledge and experience will allow them to come to the table with useful tips and effective solutions.
Hallett remembers dealing with a difficult fire marshal at the scene of a marina fire in Bradford, Ontario, which resulted in the sinking of 29 vessels.
“First of all, I pointed out to the fire marshal, who was doing this great investigation, that he had to stop,” Hallett recalled. “And he said, ‘Well, you don’t tell me what to do.’
“And I said, ‘I’m pointing out to you right now that this harbour is full of gasoline and diesel and you have a diver underwater, and you have a guy in a boat above the water smoking. It’s about to blow up in the next 60 seconds if you don’t stop.’
“Having pointed that out, you are definitely in charge of this [situation],” said Hallett.
Noting that many stakeholders — both private and public — can’t afford to pay immediately for the costs required to clean up the site of an environmental disaster, Cherrie said claims professionals can leverage their insurance companies’ ability to pay for the necessary work as a means to take control of mop-up operations.
In the case of the marine fire, Cherrie said, none of the municipalities had the money to pay for the crane required to lift the boats out of the water, thus removing onboard contaminants from the scene. That gave the claims adjusters a method for taking control of the situation.
“They had a crime scene with the fire marshal, the investigative authorities, the Ministry of Natural Resources and the Ministry of Oceans and Fisheries, and none of them had any money,” said Cherrie. “We sat down and said, ‘What do you plan to do?’
“We said, ‘We’ve got the purse, we’ve got the money, so we’ll bring in the crane if you’ll allow us to work with you, and allow Dr. Hallett to get in and control the effectiveness of the [outcome].”

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