The Environmental Risk Your Clients May Not See Coming

Fewer EPA headlines can feel like a green light, but environmental liability does not disappear when oversight fades. We sit down with CRC environmental specialists Harrison Scheider and Dustin Helmenstein to unpack the biggest misconception we hear from insureds and even seasoned agents: “less regulation means less environmental risk.” The laws that create liability largely remain, and the pollution exclusion in GL and property policies can turn an everyday incident into a painful coverage surprise.

We dig into what makes environmental claims so tricky, and along the way, we connect the dots for common insured profiles including contractors, manufacturers, real estate owners, habitational and hotel risks, healthcare, and municipalities, plus what faster permitting and accelerated construction can change on the ground.

To keep it practical, we share four questions retail agents can use right now to uncover exposures early, create better renewal conversations, and avoid relying on limited GL endorsements that are not true affirmative pollution coverage. If you want a clearer, more confident way to talk environmental insurance, pollution liability, and coverage gaps with clients, hit play and take notes. 

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Transcript

Amanda Knight 0:22

Welcome back to Placing You First, where we help retail agents stay informed, ask better questions, and bring more value to their clients. I'm Amanda Knight.

Scott Gordon 0:32

And I'm Scott Gordon.

Amanda Knight 0:33

And today's topic is one that has generated a lot of headlines recently changes at the Environmental Protection Agency. It's easy to assume that fewer

Why EPA Changes Mislead

Amanda Knight 0:44

regulations automatically mean less environmental risk, but as we're going to learn today, that's actually one of the biggest misconceptions in environmental insurance.

Scott Gordon 0:53

That is right. And joining us today are two CRC environmental specialists, Harrison Scheider, Senior Vice President and Environmental Broker, and Dustin Helmenstein, environmental broker.

Amanda Knight 1:06

This is the Placing You First Podcast from CRC Group. This podcast features news and insights from a vast knowledge base of more than 6,000 associates who write more than $32 billion in premium annually. Plus, we give you the latest information on what's happening at CRC.

Scott Gordon 1:23

This is the Placing You First Podcast.

Harrison Scheider 1:26

And now the host of the podcast, Amanda Knight, Scott Gordon.

Scott Gordon 1:31

Thanks for joining us, both of you guys. Great to be here. Thank you both. Let's start with some of the biggest misconceptions here. If EPA oversight is decreasing, why isn't environmental risk decreasing too, guys?

Harrison Scheider 1:43

Yeah, thanks uh Scott and Amanda for having us. You know, in the environmental insurance space, education is the number one hurdle we deal with every day as uh brokers. And so what a lot of people miss is that regulation and liability are two completely different

Regulation Versus Liability Explained

Harrison Scheider 1:59

animals. Um when the oversight from an EPA or a state governmental agency decreases because of people, you know, or other items that are more important or pressing to those governmental entities, um, just because the oversight eases up, that doesn't really change the underlying environmental laws that have been there really since the 80s. Um your CERCLA, your Clean Water Act, your Clean Air Act, those haven't changed. Um and no matter what administration may be at hand or at play, um, those environmental liabilities persist. And so there's two real stories here. There's changes in environmental liabilities associated with changes in the laws, but also the constant, you know, pollution exclusions that are found in everyday GL and property policies that we sell and procure all day long.

Amanda Knight 2:52

All right. Well, it seems to me then that this isn't, it's not really a regulatory story. It's really more about liability. It's a liability story.

Dustin Helmenstine 3:03

Correct. And and Harrison noted that uh previously too, where there's two facets to this. There's the regulatory part, but then there's also the liability part. The regulatory side of things, that's ever changing, right? We oftentimes see that with government changes and different regulations that are imposed by different uh whoever's in office, things like that. So that's ever changing. The liability piece of this is more or less set in stone for the most part. You'll start to see some different laws come up when there's different um new contaminants, I would say, that come into light that different uh regulatory agencies will focus on and whatnot. But all in all, from a liability standpoint, that's been pretty well established over the years. So the the policies and the environmental policies that we sell, it's not limited to just regulatory action. So a regulatory agency coming in and requiring our insured to clean up a contaminated site, for example. We're also providing first party coverage on some instances and more importantly, third party as well. And the the big thing with regulatory, which I I don't want to make sure or I want to make sure we hit on and we don't skip over it, is even if the regulatory standards are lessened now, or there's not that oversight at this point, that doesn't mean in the future that those standards aren't going to come back, or in some cases it could even become more stringent and more strict, which then would still fall back onto our insureds because environmental liabilities are a little unique in that they're what we kind of call cradle to grave, where it's strict joint and several liability.

Harrison Scheider 4:48

Yeah, and you know, we see this play out. You know, Dustin and I have worked in the environmental insurance space for the last 15 years. Um, and we've seen this play out a couple different times. Uh, both being farm kids from Wisconsin, we saw manure become a pollutant in 2014, which is wild. You know, farmers across the state uh ended up being potentially liable parties for the overapplication of something they utilized every day to grow crops for, you know, the people that they served. Um now you see PFOS in every single article known to man about it being found in different types of um food packaging and labeling items to like pants and nonstick pans that we used, whereas 20 years ago, those microplastics were used for everything, and nobody seemed to have a problem with them. Um I mean, now in California, you have to bag your groceries in paper bags when you know just 10 years ago, a plastic bag was the new idea. We were saving the trees. Um, and so what's considered a pollutant continues to change, and that affects a lot of different clients based on the pollution exclusions that were constituted back in the 80s.

Amanda Knight 5:56

So let's make this practical. What kinds of clients should retail agents immediately start thinking about? Dustin, you want to go first?

Dustin Helmenstine 6:05

Yeah, and and I'll I'll preference this by saying we're probably going to be a little biased because we're the National Environmental Practice Group. This is what we specialize in. We're fortunately, maybe unfortunately,

Which Clients Face Hidden Exposures

Dustin Helmenstine 6:18

I like to think fortunately, lucky enough to be involved with claims and see environmental claims on a daily basis. So we're often able to give exact examples of certain exposures that somebody might not think of. So this has really evolved over the years too since the implementation of pollution exclusions, and as courts have uh determined and litigated on what is considered a pollutant, where it's no longer just you look out your office window and you see a smokestack or a chemical manufacturing. Those are no longer the only environmental issues that we see. So a lot of our clients are made up of contractors, real estate owners, manufacturers, any type of habitational or um hotels. That's another big one that we we write a lot of insurance for, healthcare municipalities. Again, there's there's probably not very many instances or industries where you could ask me if there's a pollution exposure that I wouldn't be able to pick apart and and show you that there is one. I think, and Harrison mentioned on it before too, the the biggest hurdle or the biggest part of what we do on a day-to-day basis is really educating. And that's something that our team really focuses on, on our day-to-day work.

Scott Gordon 7:36

Harrison, you have anything you want to add?

Harrison Scheider 7:38

Yeah, I mean, it's tough because I'm biased and I see pollution exclusions all day long, right? And so every single client that a retail insurance agent or broker touches has some level of pollution exclusion that they're offering their clients by selling a GL or a property policy every day. Um and so those are unintended, in most cases, exclusionary terms that are being provided to their customers and their clients. Um the pollution game, we're accustomed to folks not purchasing year one, year two, or year three. Um, but usually once there's a claim or there's a contractual requirement, coverage is procured. Um, again, our biggest issue is just educating agents and their insureds on the implications of those exclusions. They're far reaching. I mean, I'll go back to fifth grade phonics, but the operative words in every pollution exclusion sold is an irritant or contaminant. Um and that can literally be anything. Uh, we've seen milk, we've seen mold, asbestos lead, um, as recently as a couple of years, even dust and uh dirt from uh project site runoff, you know, construction project site runoff dirt was a pollutant and an excluded cause of loss at a construction site. So um the level of pollutants that are being added to customers' insurance policies just continues to grow over time. Um and so contractors of all sorts, property owners, manufacturers, distributors, um, they all have some level of need for pollution coverage now. It's no longer a luxury line of business, it's really something that's um readily available at an all-time low in regards to cost. Um, and it's something everybody should be looking at.

Dustin Helmenstine 9:24

And I think just to piggyback on that too, one of the hardest answers or hardest questions for me to answer is what is a pollutant? We get that asked all the time, right? We're selling pollution insurance. What is a pollutant? My answer is I don't know. Uh it's really tough. I can speculate on what is. There's a lot of really good information out there that are written by a lot of really smart lawyers on what is considered a pollutant. I would suggest everybody go look at that. And it's state by state. Um so different states have different laws as it relates to different kinds of contaminants, pollute pollutants, etc. And it's actually really fascinating on what different states have actually took to litigation to determine if something is considered a pollutant or not.

Scott Gordon 10:12

Now, can either of you share a real world situation without naming names, um, one that illustrates how these gaps show up.

Harrison Scheider 10:21

Yeah, absolutely. I mean, we can certainly go into more uh manure talk if we'd like. Um, but that was definitely one that that took precedent for us being from Wisconsin and back in the day. But just as early as January, um

What Counts As A Pollutant

Harrison Scheider 10:34

there was a court case uh medical sterilization facility um had a permit to emit um ethyl oxide. Um and just because the permit was in place, um, there was a claim for release from a concerned citizens group. And the carrier, the GL carrier, um, ended up excluding coverage under the pollution exclusion for the emission of that contaminant. Um, and so we see it all the time. Dustin and I were also really fortunate to start our careers at a brokerage where they had expert witness services. And so um there's always another party arguing the opposite side, right? And so when you get into these claims examples or these court cases where somebody argues the pollution exclusion applies because of a release or escape or dispersal of that irritant or contaminant, there's another side to it that's arguing the opposite. And so at that exact moment, you don't want your insureds to be pointing to you as an agent or a broker relying on a GL exclusion or an exception to an exclusion. Um, further, like you don't want to have to have a GL claims adjuster trying to clean up a big old pollution mess, right? And that's what the environmental insurance industry is is here for. Um and so we see it all day long. The PFOS uh argument right now is ongoing. There's about 15,000 cases that are backlogged through the court systems. And so each state is going to decide what level of PFOS is acceptable or not. And so every other day there's a new article, a new legal um precedent setting case that says this level of PFOS is acceptable or that level. Um and so the really the only way to protect your clients is through the purchase of actual pollution insurance.

Amanda Knight 12:23

Well, and like you mentioned earlier, those things can change over time. And I mean, it sounds to me like these environmental claims have a very long tail, right?

Harrison Scheider 12:31

I mean some of the environmental laws, they're strict and absolute. Um, and so they follow the title owner of the land, right? And so even if you sold a piece of property that was polluted, um, you can still be held responsible as a potential responsible party under these environmental laws years down the road. Um, and vice versa, you can acquire those liabilities just by the purchase itself. So if you go into buying some of these properties, you can be picking up extra environmental liabilities without even knowing it.

Dustin Helmenstine 13:03

And and that's not going to be limited to just uh known conditions. So if you if you know that there's contamination there, the big one is unknown. So even if there's unknown pollution conditions there, whether it's considered a pollutant at this time, or as we're kind of hitting on, regulatory change happens and now something is considered a pollutant, even if it wasn't at the point of time when you purchased it, it is now you still have uh ownership title to it.

Amanda Knight 13:33

Well, Dustin and Harrison, correct me if I'm wrong, but a strong lesson our retail agents should take away from this conversation is it is not smart to wait till right at renewal to start talking about this. Uh definitely don't wait till there's a claim. And it sounds like maybe we have an opportunity

Real Claim Gaps In The Wild

Amanda Knight 13:54

to give some better questions that they can start using now to start getting to the heart of some of this with their clients who may not understand the scope or the potential for claims from an environmental perspective. Does that make sense?

Harrison Scheider 14:08

Yeah. I mean, in the environmental conversation, the the best defense is a good offense, right? And that's asking, you know, the right questions of your clients and customers well before there's a problem.

Amanda Knight 14:22

In the campaign piece that goes with this podcast, the article produced by Harrison and Dustin, that all you listeners are welcome to go to our website and read. But one thing I really liked about the article was that you gave agents some really practical questions to start the conversation. And there are four. So let's walk through those and you guys can kind of talk about sort of the importance of why what's the point? Why should I ask this question? Um, question one Does your client store, transport, or dispose of hazardous materials? Sounds a little bit like maybe that's a no-brainer question, but what why do we need retail agents to ask that question?

Harrison Scheider 15:03

Yeah, I mean it's a good baseline to set the conversation. Um, because in most cases, the customer doesn't know, right? Um they may, and they may be in a business or a line of business that does handle or or you know, mix and blend, you know, hazardous waste of some sort. Um, but in most cases, they won't and they're not going to know. And that creates um an opportunity for the retail broker to then ask the question, well, have you heard of the pollution exclusion?

Amanda Knight 15:29

Right. Opens the door.

Harrison Scheider 15:31

Right. It opens the door. Um, and that's really what we do all day long is the pollution conversation can be used as a um a leverage tool, right? To whether it's opening new doors uh for new customers and prospects, but also a retention tool uh for your renewals. Um have you ever heard of the pollution exclusion? Do you know how it works on your GL and property policies? Um and that's something not only Dustin and I are capable of handling, but all the other brokers on our team as well. Um we help agents walk through that conversation daily. Um, and so that's really a great way to set the table for your customers and your clients because they're not gonna know. And it's gonna you'll you'll be able to flesh out some as some answers and some questions then to you know move that conversation down the road.

Amanda Knight 16:17

Question two Are they purchasing property that may have historical contamination? Why is that a good one, Dustin?

Dustin Helmenstine 16:27

Yeah, I think that's um it's probably sim similar to the first question where if you're asking if they are purchasing contaminated properties, they probably know they have some type of exposure. I would probably rephrase this question slightly and just say, are you purchasing, buying or selling properties? Um to my earlier point, the big risk on this not isn't isn't always the known pollution conditions that are there. Oftentimes, if there's no-one contamination at a property, there's certain activities that are already being in place to look at those contaminations, whether that's remediating it or putting different types of controls in place so that that contamination doesn't migrate to another area, something along those lines. The the big part with buying and selling properties is the unknown. Is what what was there, what could be there, and then again to kind of tie it into this podcast when regulatory laws change, something along those lines, you know, we don't know at that time then what could be considered a pollutant five, 10, 15 years down the road.

Amanda Knight 17:41

Question three Is the client accelerating

Long Tail Liability For Property Owners

Amanda Knight 17:45

construction under faster permitting? Dustin Harrison? Why is that a good one?

Harrison Scheider 17:51

Yeah, I mean, we're seeing a lot of new uh infrastructure projects, right? Data centers, um, electrical lines, uh, water trying to get to these facilities and advance technology in our society. A lot of those permitting processes have been sped up, and trying to get folks to get projects done quicker doesn't always result in great environmental conditions. Um, usually let sleeping dogs lie a lot longer, um, which ends up increasing claims costs down the road. Um, you go to rebuild a brand new building in a green way, um, and it gets sped through the pyramiding process, and oh, three years into the project, there's actually a contaminant we didn't think of or we didn't contend with. Um, that's something that you know our industry is certainly on the lookout for as uh you know these facilities get built. Um, but those can all be managed and handled through environmental insurance. Um and so as long as you're on the offense and you have that conversation early on, um, we can usually handle those those risk, those risks going forward.

Amanda Knight 18:58

Okay, question four, last one. Is the client relying only on a GL policy with a pollution exclusion? How often is the answer to that? Unfortunately, yes. Do you find that I I assume based on this conversation, we find that more than we would like to.

Dustin Helmenstine 19:16

Definitely, definitely. And um we we actually our team put together a great article that uh is up on the CRC page that kind of goes over to this and the pitfalls on GL pollution extensions and the gaps in coverage that still exist. I think this could be a topic on its own. Um we we see it all the time. And unfortunately, it's needlessly leaving their insureds underinsured. And a lot of times we'll see this on certificates of insurance where they're checking the box that says they have pollution insurance and it's just a GL extension which has a lot of different gaps and there's a lot of limitations to it. Um but this is also and the reason I love this question is because it's a great door opener. If one of our retail partners goes into a prospective or prospect meeting and they ask this question, and if they get the answer, yes, we do have pollution through our GL, their foot is automatically in the door. They're they're gonna be able to provide so much value to that insured just by educating them on why that's not the case. And again, that that's that's where our team really comes into play, and that's where we feel that we can provide a lot of value is because we focus so much on education and being able to help our retail partners open that door and put a wedge in that current relationship.

Harrison Scheider 20:44

The other thing to understand in that conversation is a lot of times those exceptions, or I mean those endorsements and exclusions are exceptions to an exclusion, right? And so when has an exception to an exclusion ever been affirmative coverage? And so if agents

Four Questions Agents Should Ask

Harrison Scheider 21:01

and retailers are out there certifying that pollution of coverage is is included in these programs, that's not the case because it's there's no actual insuring agreement within the ISOGL policy for pollution. Um, it's just an exception to an exclusion. Um and so that's the really difficult part. Um we help you know agents and brokers stay out of that ENO soup uh all day long by you know educating them and their customers and clients.

Amanda Knight 21:26

Well, you know, before we jump into the fun part of the podcast, um that was gonna sort of be my last final follow-up is I mean, I can tell based on our conversation that, and Dustin mentioned it, right, that part of the value of partnering with you know CRC's environmental practice um is that educational piece, right? Helping to educate retail agents and thereby their insureds. But what else, Dustin Harrison? I mean, you mentioned you've been doing this for at least 15 years. What else do you feel like sort of sets CRC's national environmental practice apart?

Harrison Scheider 22:05

Yeah. Um, you know, we've been doing this for a long time at a couple different places. And the one thing that really sets the CRC national environmental practice apart is um the support we have uh from the C suite. They're really invested in us being a specialist team. Um Within a vertical that aligns with a lot of our retail clients. We've built the team out specifically where our middle units are all underwriters with extensive experience in site pollution, contractors pollution liability, and then package environmental pollution and professional programs. And so when it comes to the marketing of our business, placing the business into the marketplace, there's no market that we're not appointed with. We're respected across the industry. And we've got a team that understands how to deal with different types of exposures day in and day out and hold the agent's hands through those processes and those conversations. And so it's really a full-on support system of teamwork that sets the COC environmental team apart.

Dustin Helmenstine 23:06

Yeah, and I would just add to

Why CRC Environmental Practice Helps

Dustin Helmenstine 23:08

that one thing that we find really important and that we really strive for is that relationship with the carrier partner as well from the underwriting side of things. Obviously, this is a relationship business, right? You can only get as much done as you have that relationship with an underwriter or with a carrier. And we we try to go out of our way to make sure that we're being fair to our underwriters, that we're giving them good submissions, that we're helping them underwrite the deal. And at the end of the day, that's just to the benefit of everybody. It's it's pretty common due to the common thought that's still out there. As we discussed before, that I don't have a pollution exposure. I'm not concerned about pollution coverage until they actually need it. So a lot of what we do on a day-to-day basis is that last-minute deal of we need to get something done, and it's when do you need to get it done? And well, it was yesterday that it needed to get done. So that's where it's really important, and we're really fortunate to have those relationships at the uh at the carrier level as well.

Scott Gordon 24:11

So we're gonna go on with this section where we like to get to know our people a little better. It's nice to know what you guys know about insurance, but we like to know the people behind the knowledge. So we do a little thing here we like to call rapid fire, and we just ask you questions and you just give us answers quick, quick, quick. And our first question who do

Rapid Fire!

Scott Gordon 24:33

we want to start with? Who wants to start? Harrison, Dustin, who wants to take it first?

Harrison Scheider 24:36

Mine's gonna be a little longer, so go for it, Dustin.

Scott Gordon 24:39

Okay, Dustin, you start off. What's the dumbest thing that you're really good at?

Dustin Helmenstine 24:44

Mowing the lawn. I don't know why, but my neighbors say I mow the lawn really well.

Scott Gordon 24:49

Do you do the pattern, the nice pattern?

Dustin Helmenstine 24:53

No, I I don't. It's it's a push mower. Uh I go out there, and yeah, uh all of a sudden, every every spring though, and throughout the summer, the neighbors say that we have a very nice lawn.

Amanda Knight 25:04

So that's impressive. It's harder than you think. I don't know if you realize that, but like you should probably come to my house next because my neighbors probably don't say that.

Scott Gordon 25:14

Do you live on a hill?

Amanda Knight 25:17

No, I'm just not great at lawn.

Harrison Scheider 25:19

Those drainage dishes are always very hard. You can't get the stripes just right. Yeah, I know.

Amanda Knight 25:24

All right, Harrison. You're Harrison, what about you?

Harrison Scheider 25:27

Uh mine might be uh being a young father. So I had kids very, very early. I'm the most efficient broker you've ever met. I have four kids. It took me twice, and I did it all by 23. Wow. Um my house is full of athletes, and I'm at a training of some sort or a game every single day of my life right now. So that might be the dumbest, smartest thing I've ever done.

Scott Gordon 25:49

I was gonna say that there just know that Harrison called fathering a dumb skill. Um the second question. Um, yeah, I've done it. I only had the one, but it was pretty dumb, yeah. Um uh you can have an unlimited supply of anything except time or money, of course. What would you choose?

Dustin Helmenstine 26:13

I would go with land. So I'm a big outdoorsman, and I know there's only a finite amount of land, and truthfully, that would probably tie into the money part of it. Um, but land, I uh I would have a lot of fun with an unlimited access to as much land as as is out there, I guess.

Scott Gordon 26:32

Now, Dustin, one of the first questions you should ask is Is this land contaminated or bulletin? Right.

Amanda Knight 26:39

And if not, and I purchase it, how much of it can I know with my that too.

Dustin Helmenstine 26:46

See, and I would have fun doing that too. That that's the other part of it.

Amanda Knight 26:50

So all right, Scott. Last question.

Dustin Helmenstine 26:53

Did we get wait, we didn't get Harrison?

Amanda Knight 26:55

No, you're fine.

Scott Gordon 26:56

Skipping people.

Harrison Scheider 26:57

No, no, no, no. No, shoes. I'm a big sneakerhead, I've got all sorts of shoes. Okay. Um, grew up playing tons of sports, and so I've got everything from basketball to running the football cleats and everything, and they're under the sun. So, yeah, shoes for sure. I could buy them till the end of time.

Amanda Knight 27:13

I love it.

Scott Gordon 27:14

Nice. All right, our final question. Uh, summer means travel to a lot of people. What place have you visited that filled you with the most awe?

Harrison Scheider 27:23

Go for it, Dustin.

Dustin Helmenstine 27:25

My wife and I, for our honeymoon, we went out to Bar Harbor, and that probably had the most different kinds of aws that that we've seen. Um, our favorite part was probably Acadia National Park, and we went up and did the sunrise. Um, my wife wasn't too happy waking up. I think it was at like 2 a.m. or 3 a.m. or something like that to make it up there. I'm an early riser, so I was all for it. But um once we saw the sunrise, it was it was really worth it.

Amanda Knight 27:51

She forgave you.

Dustin Helmenstine 27:53

Yes. Yes.

Scott Gordon 27:54

Yeah.

Amanda Knight 27:55

Harrison, what about you?

Harrison Scheider 27:57

Mine's less exciting. Um, it's just a training facility. Uh summer is uh separation season for our family, and so um, that's the most all I've seen is just the growth in some of my kids and all the effort and work that they put into. It's really uh exciting to watch.

Amanda Knight 28:11

Babies don't keep.

Scott Gordon 28:13

Well, that fills me with babies don't keep, they just keep growing.

Harrison Scheider 28:18

Well, absolutely.

Scott Gordon 28:20

I know, right? Um Harrison and Dustin, thank you so much for joining us today. This was great. Uh we learned a lot and helping us uh thanks for helping us unpack a topic that's much more nuanced than a lot of people realize.

Harrison Scheider 28:33

Yeah, absolutely, Scott. Thanks uh to you and Amanda both for having us.

Amanda Knight 28:37

If there's one takeaway from today's conversation, it's this less regulation doesn't mean less environmental liability. In fact, it may mean fewer warning signs, but greater long-term exposure and bigger surprises down the road. The good news is that retail agents can make a real difference by asking the right questions, doing that early, and partnering

Core Takeaway And Next Steps

Amanda Knight 28:59

with specialists when environmental exposures arise. Thanks for listening to Placing You First. If you enjoyed today's episode, be sure to subscribe and share it with a colleague. We'll see you next time.