Consider this situation:

A safety and environmental consulting firm specializes in quick responses to environmental incidents, such as cargo spills of contaminants from petroleum haulers. They assist clients with cleaning up and disposing of hazardous waste in order to comply with all local, state, and federal laws. After one case, a client was fined for not properly reporting and monitoring its post-spill efforts, so the client decided to sue the firm. They hired the firm to handle everything, and feels that the firm has not done that. A Safety and Environmental Consultant Liability (SECL) coverage policy would respond to this claim. It arose out of the firm's professional services.

SECL coverage responds to losses resulting from acts, errors, or omissions made by safety and environmental consulting firms. This is a form of professional liability coverage which protects a firm's owners, partners, consultants, and employees.

The SECL Market is characterized by insurance companies that offer programs designed to attract and cover specific niches. Some companies offer coverage to all types of safety and environmental consulting firms. Others may target only specific types of operations.

How does SECL differ from professional liability?

SECL coverage is not standardized and is a bit different than professional liability for other industries. Its coverage tends to be less distinct. Where policies that protect doctors, lawyers, funeral directors, architects, and other professionals complement the protection provided by general liability policies, SECL coverage may overlap or create gaps in coverage. Therefore, SECL firms must take greater care in reviewing policies to avoid problems.

A good strategy is to use the same carrier to provide both coverages. This minimizes the difficulty in coordinating claims and keeps from getting caught in the middle of a "tug of war" as the insurance companies argue about which one must respond.

Unlimited Defense Options

Defense options under SECL policies may be provided on an unlimited basis or as a separate limit. Firms that work with larger clients or with those that do complex work should prefer the unlimited option in order to preserve their policy limits.

Definitions - Special terms are used throughout the coverage form which are related to situations that affect safety and environmental consulting firms. Following are terms that may appear in such policies:

Cleanup costs - This includes reasonable expenses incurred to investigate, monitor, test, remove, dispose of, neutralize, and/or treat pollution conditions to the extent that local, state, or federal laws require in cases where the insured is legally obligated to do so.

Damages - This is the amount an insured party is legally obligated to pay as a result of a wrongful act or a covered claim, including judgments and settlements. It may specifically exclude punitive or exemplary damages.

Defense costs/expenses - These are legal fees and expenses incurred to investigate, defend, arbitrate, mediate, or appeal a claim. It also includes the costs of any other alternative dispute resolution proceedings.

Employee Benefits Injury - This is an injury that arises out of any act, error, or omission in administering the insured's employee benefits programs.

Fungus or fungi - This is any type or form of fungus, mold, or mildew. It also includes any mycotoxins, spores, scents, or by-products that fungi produce or release.

Natural resource damage - This means damage to, injury to, destruction of, or loss of groundwater, wildlife, air, land, fish, and similar resources that any local, state, or federal governmental entity owns, holds in trust, manages, or otherwise controls.

Wrongful act - This is any alleged or actual act, error, or omission by an insured. Operations that specialize in handling environmental responsibility involve work that includes high stakes when losses occur. Legal compliance, testing, and monitoring responsibilities may last for months or years after a clean-up. Relying on an insurance professional may be critical in securing the right protection.

If you think you might need an SECL policy, call the insurance professionals at Williams Insurance. With over 80 years of experience and expertise, we can make sure all your coverage needs are met in a way that's right for you and your business.


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