Release Liability Working On Property: Fill & Download for Free

About 20 years ago, I was representing an electric utility that many years earlier maintained its headquarters in a rural area that subsequently became a very busy part of the city. In the early 80s, the headquarters building and several acres of property had grown in value so the utility decided to sell the property and relocate to an area with less traffic and more room. The property was sold to an auto dealership pursuant to a lease-purchase agreement, with the understanding that after the ten-year term of lease expired, the car dealership would pay the balance due and take title to the property.When the ten-year deadline arrived, the dealership began the process of obtaining the necessary financing required to pay off the balance. To no surprise, the lender conditioned its loan to the dealership on receipt of a clean environmental Phase I site assessment. I knew that was bad.In the years that the utility had owned the property and maintained its headquarters on the site, it was a common practice to bury trash and other objects on the property, many of which are now considered toxic. That was in the years before the PCBs found in numerous components of an electrical system, including capacitors and transformers, were understood to be carcinogens. When the results of the Phase I Site Assessment came in, it was ugly. Numerous indicators of the presence of contaminants dictated that a Phase II assessment and site cleanup would be required. Ground-penetrating radar revealed the existence of several buried dump sites and the utility was faced with bearing the cost of a site cleanup or a breach of the lease-purchase agreement and millions of dollars in damages.The site cleanup process began. The “burial sites” were excavated, the contaminants and contaminated soil were removed and the excavation sites were back-filled with “clean” dirt. As the process went forward and the cost of the cleanup and remediation escalated, it occurred to me to check the utility’s old liability insurance policies to see if there might be coverage for some of the cleanup expenses. I was able to locate policies for 1967–1975 (the utility entered into the lease-purchase agreement in 1975). To no surprise, the policies had environmental contamination exclusions (and specifically, coverage exclusions for environmental contamination of the insured’s property caused by the insured), except, that is, the liability policy from 1969. For some reason which I was never able to determine, the policy in effect in 1969 had no environmental exclusion for contamination caused by the insured, whether such contamination was of property of a third party or property of the insured.After finding that the 1969 policy did not contain the environmental contamination exclusion, and satisfying myself that coverage under the policy was provided on an “occurrence” basis (coverage was provided for incidents which occurred during the policy period, without regard to the passage of time between the incident, discovery of the incident and the date of the claim), I decided to contact the utility’s CEO to propose making a claim under the 1969 policy.I learned that the utility’s CEO was at the site, checking on the progress of the cleanup, so I drove to the site to tell him about my discovery. I found the man standing near the back of the property, looking at the many excavation holes and all the excavated materials rapidly piling up, with a forlorn look on his face. Obviously, the cleanup was becoming an expensive proposition. I told the CEO about the 1969 policy and pitched to him my theory of recovery, suggesting that we should make a claim for the cleanup cost against the liability insurance carrier who wrote the 1969 policy. I reasoned that under a worse-case scenario (and most likely), the insurance carrier would deny coverage. I also pointed out the possibility that we might be able to recover some portion of the cleanup cost. Given my young age and relative inexperience, he gave me a rather dubious look and asked whether I really thought an insurance company would provide coverage for damages to the utility’s property that was caused by its own actions that were undertaken over 20 years earlier. With unwarranted confidence, I told him that there was a reason that the other policies I had found and reviewed contained an environmental contamination exclusion and thus, there must be a reason why the 1969 policy did not contain the exclusion. I further explained that the insurance policy was written by the carrier and would be construed against the carrier. As he thought about what I was proposing, an employee of the utility overseeing the cleanup walked over to where we were standing and said, “Look what I found at the bottom of the hole we are digging.” He handed the CEO a rusty license plate dated 1969.With the license plate as evidence (and a sign from God), I sent a demand letter to the insurance company seeking indemnity under the 1969 policy for the cost of the cleanup which was quickly approaching $1.5 million. To no surprise, the carrier did not respond. I then consulted with the CEO (who didn’t like being ignored anymore than I did) and secured his consent to file suit against the carrier, seeking indemnity, bad faith damages and attorneys fees. That got the attention of the carrier and generated a response. The carrier’s answer to my suit was an incredulous denial, together with a suggestion that my demand and subsequent suit were frivolous.I no longer recall the exact sequence of events but after several months and the exchange of various pleadings, by which time the cleanup had been completed at a cost of $2.1 million, one day I received a phone call from the carrier’s general counsel, along with a vice president. After the customary exchange of pleasantries, the carrier’s vice president stated emphatically that the company would never pay such a ridiculous claim and that they were not in the business of paying their insureds to contaminate their own property. Before the words, “Well, why the hell are you calling me?” could formulate in my mind, the V.P. continued, “While we will never pay a claim such as this one, we find the risk of being haled into court every time an issue arises which implicates our coverage obligations for actions your client took in 1969 to be unacceptable (because such claims are so frequently asserted, no doubt). We are no longer willing to accept exposure to such risk. Accordingly, we propose to buy out of all of our risk and liability under the 1969 policy by paying your client the sum of $2.1 million.” After making sure I fully understood his offer (I did), I calmly told him that I would discuss the offer with my client. I silently prayed I could reach the CEO and obtain his approval before the insurance execs changed their minds.I called the CEO and explained the phone call and offer. Three times. The insurance company would not pay the utility’s claim, but it was willing to pay the utility $2.1 million (the cost of the cleanup), in return for which, the utility would sign a Release of Liability, agreeing that the utility could never again assert a claim against, or seeking coverage from, the insurance carrier for any liability attributable to any act of the utility occurring in 1969 (25 years earlier). We both agreed that the offer was immensely fair. His only words to me following his grant of consent to the settlement was, “Hurry!” It was the craziest suit in which I was ever involved.

It can be universally agreed that this is great news.For a long time, India has eyed FDI and FII to boost the economy but foreign investors have been wary considering the red-tape and many inefficiencies in the Indian system.However, planned improvements over the last 4–5 years have started to yield results.Not only is India one of the best improving nations (no mean feat considering its size), it is remarkable that it has improved across virtually all parameters.(See: Ease of Doing Business - Data - India)Even when the last report was released, the Indian government commented that a lot of work already done wasn’t factored into the ratings.Now it takes only 60 days following eight online procedures to get a construction permit in Delhi and Mumbai, which are taken into account for India’s ranking in the annual ease of doing business report, government officials told a team of the World Bank last week. In New Zealand, it takes 93 days and 10 procedures to get a construction permit, officials said.SourceReduction in both the amount of time taken to get a permit as well as the associated costs, plus the introduction of laws mandating constructions firms to take up decennial liability insurance, essentially making them accountable for the quality of their constructions has helped India double its score in a year.The implementation of the Goods and Services Tax (GST) has helped increase scores on both “starting a business” and “paying taxes” parameters last year.The paperwork for registering a company has also been reduced.REDUCTION IN PROCEDURES: Five procedures for Starting a Business are now integrated and can be done simultaneously in One step. Using the newly launched integrated e-Form SPICe, stakeholders now apply for Company Name, Company Incorporation, DIN of the directors, PAN and TAN for the newly incorporated company, and avail all FIVE services simultaneously. The requirement of a company seal has also been removed vide Company (Amendment) Act, 2015. Therefore, the reforms undertaken by the Ministry of Corporate Affairs have helped in reducing the procedures for starting a business in India and provide Ease of Doing Business.(Source : MCA)Getting credit is easier now too, largely in part due to the revamped Bankruptcy and Insolvency law.The law empowers lenders to drag companies that have defaulted for 90 days on debt exceeding Rs100,000 to the bankruptcy court which then places it under an administrator to examine a revival or an outright sale. If a plan is not worked out within three quarters, then the company’s assets get liquidated. The objective was to bring debt-laden companies back on their feet and help banks free up $210 billion of stressed assets for lending.All in all, this is the culmination of large scale policy and implementation changes that have been carried out in the last few years.If we keep up the pace of improvement, another 6–7 point increase in score by next year could very well place India in the top 40–50. This could be achieved by working on revamping the current labor and property laws, parameters in which India still ranks very dismal.

Yes. In the US they have private commercial insurance or are self insured up to the limits of the Price-Anderson Act, as described by other posters. If you Google "Price-Anderson Act" you will get a wealth of information, with a brief summary here:https://en.wikipedia.org/wiki/Price%E2%80%93Anderson_Nuclear_Industries_Indemnity_ActAlthough I am definitely pro-nuke after working in the industry, I do find this to be a form of corporate welfare and find it difficult to understand why an industry that is so well run (from my experience) would require this type of Cap on their liability. Probably a holdover from the days when Nuclear Power was in it's infancy and the government was promoting "Too cheap to meter" electricity.One thing to remember, the liability from a release like Fukushima, Windscale or Chernobyl would seriously affect people and property values downwind from the accident site. I'm guessing those claims could run into the hundreds of Billions, just based on property values. At least in my county (California).