VERTEX was retained by an international property and casualty insurance carrier to assist them in their review and investigation of a claim made by an insured earth moving contractor on their environmental pollution (Contractors Pollution Liability) Insurance policy. The claim pertained to the Insured’s provision, delivery, and emplacement of 389 truckloads of fill material on an undeveloped private parcel of land owned by the Insured’s client, at the request of the client.
The material was placed by the Insured contractor in an area located within 100-feet of a stream and classified as a wetland by the New York State Department of Environmental Conservation (NYSDEC). Pursuant to a complaint made by a nearby resident, a NYSDEC representative inspected the site, and NYSDEC subsequently issued an Order to the Insured and property owner establishing their legal obligation to remediate the impacted area via removal of the deposited fill material and wetland restoration activities, which was estimated to cost approximately $500,000.
As a result of exclusionary language in the Insured’s policy, VERTEX was asked by the carrier to perform a review of the due diligence that their Insured had performed prior to placement of the fill. Although the Insured reported that they had performed proper due diligence employing a reasonable standard of care, a review conducted by VERTEX concluded that their due diligence efforts were minimal and inadequate and did not even include reviewing NYSDEC’s published wetland maps, which clearly identified the area where they deposited the fill as a wetland. The carrier denied coverage of the claim based on the policy language and, in part, the results of VERTEX’s review.
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