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This is only a partial report. For a complete FREE REPORT by email in PDF format, respond with the word "REPORT" in the subject line. Because of several recent landmark legal decisions, ice rinks with ammonia systems will likely be denied any liability coverage for any damage, injury, or death resulting from an ammonia leak regardless of cause. Basically, these new court rulings in favor of insurance providers mean those who own, operate, sell, or have stamped drawings as professional architects and engineers now do not have insurance coverage for claims resulting from an ammonia incident with most standard liability or errors and omissions insurance. More information and actual case-law summaries, scroll down. Who Is Affected By This Ruling Against Ammonia Leaks As A Non-Covered Insurance Claim? Imagine an NHL arena with 16,000 fans having an unusual ammonia leak resulting in evacuation, potential injury, or even death and not having any insurance company to ward off the legal bills and medical claims. Imagine a community recreational rink with several hundred people public skating with a similar event. Even if not one person were severely injured other than the need for oxygen or examination, their residual physiological or psychological claims would hit our industry without any insurance coverage. Without coverage, such a claim could severely impact the deepest pockets of an entity like the NHL. The thought of being so exposed from a liability viewpoint is unthinkable. However, because of some recent events in the legal system, those with ammonia based refrigeration systems and typical liability insurance policies now face this very situation. Based upon the precedence tested at State Supreme court levels, few businesses operating in or for the ice-rink industry with ammonia refrigeration systems are covered. If, after reading this information, you are still an unbeliever, contact your insurance provider and ask for written confirmation of coverage. We wish these acts were not true as they could have an affect on many operators. After the call, you will become a believer fast and see why this is such a critical alert for the ice- rink industry. On January 20, 1999, in Ducote v. Koch Pipeline, No. 98-CC-0942, a majority of the Louisiana Supreme Court ruled that when an insurance policy contains an "absolute pollution exclusion", "The plain language of the insurance contract precludes coverage for bodily injury or property damage arising from a polluting discharge...regardless of whether the release was intentional or accidental, a one time event or part of an on-going pattern of pollution." To run any business without liability insurance would be considered economic suicide. For those who have installed or own ammonia-based systems you are naked from an insurance standpoint unless you immediately purchase a �Pollution And Remediation Legal Liability (PARLL) policy. The frightening detail is that insurance providers say the PARLL policy will be extremely expensive if one can even obtain such a policy. The writer contacted representatives from K&K Insurance, Rice Specialty Insurance, and Richardson Insurance who all confirmed these new rulings to be an issue for those at risk with a hazardous material incident such as an ammonia leak. What Changed With Ammonia Specifically And Why? With environmental claims providing probably the greatest ongoing exposure for any one type of claim in the history of the industry, it�s clear why insureds and insurers have employed every conceivable argument in their coverage interpretation battles. Billions (some say a trillion) are at stake, with the coverage results sometimes turning on how many justices prefer one dictionary definition over another. To stave off future litigation, in the mid `80�s, insurers removed the qualified pollution exclusion from CGL policies and crafted a new �absolute pollution exclusion.� While the intended purpose of the new exclusion was to minimize litigation of pollution-related claims, the absolute pollution exclusion is now the most litigated coverage issue. With the above noted case going to the supreme court level, with the ruling resulting in ammonia leaks not being covered, along with several other states equally ruling, it appears the debate over �Ammonia Emitted From A Refrigeration System� is over. Those of us in the ice-rink industry who have an ammonia system must reside themselves to the fact that any future claim will likely be denied meaning they have no insurance to protect them from one of the most high risk systems in their complex. Quoting one insurance provider who specializes in the ice-rink industry: �This is a major issue. The insurance industry has changed dramatically since the 9-11 event. In the past, insurance companies may have settled small claims that they are simply unwilling to settle voluntarily today. No serious ice-rink claim has yet tested the insurance industry since the 9-11 tragedy. Given the recent case law that specifically excludes coverage for �Ammonia Emitted From A Refrigeration System,� we as brokers cannot represent coverage under current General Liability Policies. We also are concerned if the special insurance can be obtained at all, and if so, it could double insurance rates for ice rinks.� So, Who Is At Risk? Literally anyone associated, past or present, with an operating ammonia refrigeration system! Some may say an ammonia refrigeration system is safe if properly installed in accordance with all code requirements. This insurance alert is not meant to open the debate on ammonia safety or risk. We all believe automobiles are considered very safe today, but who would own and drive one without having adequate insurance? No one! Why Ammonia? Ammonia is classified as a highly toxic and highly hazardous by both the EPA and OSHA. It is regulated under the Hazardous Chemical Reporting Law for any complex over 100 lbs which all ice rinks fall under. See the EPA Ammonia Alert at the end of this document for all the rigid requirements of legal ammonia use. Ammonia and the extreme governmental classifications and legal statutes governing its use provided an ample arsenal for the insurance providers to argue pollution exclusion with. For the legal cases to be argued all the way to the state (the supreme court in some cases) regarding ammonia claims, the fact of any ammonia claim being excluded has been tested. To date, three major cases have been argued. With each win for the insurer, the likelihood of policyholders for future claims becomes increasingly dismal. Based upon the recent events, it is the opinion of top insurance experts that most claims for injury or damage from ammonia will be denied. This means if a worker, skater, patron, or community member is killed, hurt, or makes claims of long lasting medical illness, the chance of having the insurance company fight any claim legally, much less payout on a claim, will not occur based on standard general liability policies. Even if a claim is without any merit by a disgruntled employee who simply smells ammonia typical of some ammonia mechanical rooms, all expert fees and legal costs will come out of the pockets of the defendants. Even the simple legal defense of a claim without merit could cost in upwards of hundreds of thousands of dollars depending upon the case's complexity. And, this is if you win the case on your ammonia claim. For claims, which are covered, the insurance provider assumes the legal cost of defense. Now with no insurance, only you will pay. Boiler and equipment policies also do not normally provide protection under this ruling for an ammonia leak. Only a special pollution policy would provide the protection, which all ammonia owners thought they had in the past with general liability policies. Those at risk include but may not be limited to the following: A) Any architect/engineer to a project, as the professional of record, since they, too, have no coverage for claims under these new rulings. Errors & Omissions insurance policies typically mirror the same exclusions as general liability policies for commercial businesses. Even if a professional is able to obtain a pollution policy now, which is questionable, they are still responsible without coverage for all ammonia systems installed prior to having such a policy instated. Professional designers when told about this new case law offered extreme skepticism whether they would specify ammonia systems any longer. B) Ice rink owners and operators with ammonia systems. Not only do they not have insurance coverage, their installing contractor, architect/engineer, or even service provider also likely will not have coverage they can rely upon. C) All contractors and service providers who either installed or support ammonia systems. D) Any financing institution, which provides funding for the ice arena, past or future. One accident and claim could result in collapse of the business without insurance coverage. E) All persons living in a community where an ammonia system is installed and considered in the risk area as defined by the EPCRA (Emergency Planning And Community Right-To-Know) zone according to law since they have no protection with claims without an insurance provider to assure payout on claims. F) Local planning and zoning boards since they could be at risk for permitting ammonia systems should an incident occur where no insurance is provided to protect it citizens. In such a situation it would not be reaching in today�s society for claims to be made against the planning board for permitting such systems. G) Any insurance broker writing policies for ice rinks that does not clearly disclose the exclusion of ammonia-based systems being covered. Other Topics & Information In The Report Include: 1) Now That You Know You May Not Have Insurance, How At Risk Are You? 2) What Can Cause An Incident With Ammonia Systems? 3) A New Leak Risk - Ammonia Theft May Cause Releases And Injuries 4) What About Contractors Installing And Promoting Ammonia Systems? 5) How Does This Case Law Precedence With Ammonia Refrigeration Systems Affect Financial Relationships? 6) Is Disclosure Of Insurance Gap A Requirement? 7) What Is a "Pollutant" As Defined By Your Insurance Policy? 8) Pollutants As Available & Defined Through The International Risk Management Institute 9) What About An Ice Rink Ammonia Leak From Corrosion? 10) Impact With Protection From Ice Rink Indoor Air Quality Claims 11) Sample Claim Scenario With PARLL 12) Ammonia Gas Release Coverage Provided Only Because Of PARLL (Pollution and Remediation Legal Liability) 13) If Special Insurance Can By Bought And How Much Will It Cost? 14) What About Other Refrigerant Leaks Other Than Ammonia? 15) LINKS WITH MORE INFORMATION ABOUT AMMONIA INCIDENTS AND HOW THE INSURANCE INDUSTRY TREND IS GOING 16) Pollution Exclusion Enforced by Louisiana Supreme Court 17) Numerous Case Law Summaries 18) Hazardous Material Alert From The EPA (Environmental Protection Agency) and OHSA. The referenced report was assembled by John Burley. It contents are the result of an investigation of legal cases along with the consultation of experts within the insurance field. This report is not to be interpreted or substituted for appropriate legal or insurance advice. You should consult with trained professionals who are engaged in your specific legal or insurance matters for conclusions or actions relevant to your businesses best interests. If you have any question or want clarification of the facts contained within this document, we urge you to contact your lawyer and insurance provider. Get confirmation in writing now to avoid risk later from your insurance provider. John Burley is president of Burley's Rink Supply and has been engaged in the ice-rink industry for over 20 years and is a leading authority regarding ice-rink design, construction, and operations. John Burley can be reached at 1-800-428-7539. A complete copy of the FREE report can be requested in PDF format by replying with the word �REPORT� in the subject line. If you are receiving this notice because you had indicated an interest in the subject matter promoted by Arena-Watch. If you would like to be removed from this list you will be missing out on tremendous specials and beneficial industry news not available anywhere else. Nevertheless, if you want your name removed from this list, reply with the word "UNSUBSCRIBE" or "Remove" in the subject line. Arena-Watch has no affiliation with the NHL Hockey League. Arena- Watch is produced by John Burley as an informational resource to the ice arena industry.
