HFC has long specialized in providing custom insurance coverage for the dairy industry. Our latest offering to the dairy industry addresses an ever-changing, yet ever-present operational exposure… pollution insurance coverage. Since the early 1980s, most commercial liability insurance policies contain a pollution exclusion; effectively removing or severely limiting coverage for both sudden and accidental (spills) and non-sudden and gradual (historic) pollution exposures. In the recent past, pollution insurance was thought to be too expensive for too little coverage. Pollution insurance has evolved over the past twenty five years to provide comprehensive coverage at affordable premiums. HFC has selected a group of A rated environmental insurance companies to respond to the needs of the dairy industry.
The DOPPL Program concentrates on the environmental exposures of the two primary entities that comprise the dairy supply industry:
The risks from each of these areas of the dairy industry are contemplated in the pollution liability insurance policies utilized in the DOPPL Program.
A milk producer may have a sizeable pollution exposure generated from their storage of anhydrous ammonia in aboveground storage tanks used for the refrigeration of products. Valve failure, puncturing a tank with equipment or by contact with a vehicle, leaks during offloading processes, and human error can result in the release of ammonia into the atmosphere. Depending on the proximity to residential or commercial areas, an ammonia release can be devastating to human health and the environment. The potential bodily injury and property damage suits generated by an ammonia release may approach seven figures. An ammonia release is not covered by a traditional commercial liability insurance policy.
On the other hand, a livestock intensive operation has more of a concern pertaining to the handling and ultimate disposal of animal waste. The DOPPL program considers this broad spectrum of environmental risk associated with the dairy industry to fill the gap generated by the pollution exclusion. Manure and wastewater may provide a pathway to introduce high levels of nitrogen, phosphorus, metals, pathogens, and ammonia. Increased levels of nitrogen and phosphorus can cause lower levels of dissolved oxygen in water, choking animal and plant life in water systems. Nitrates can contaminate drinking water supplies. Cleanup costs and bodily injury exposures caused by this exposure are not covered under a traditional commercial liability insurance policy.
Other typical environmental exposures found in the dairy industry may include:
The DOPPL insurance Program includes the following coverages to address the needs of the dairy industry:
Federal and state environmental laws and regulations have imposed a vast infrastructure of reporting requirements and permits that now govern the dairy industry. These laws and regulations will only become more stringent in the future. In many states across the country, environmental regulations that govern dairies are being strictly enforced causing an increase in awareness from the public, creating a culture for potential class action suits. To top it off, Federal laws deem that pollution liability is considered strict liability, making environmental claims very costly to settle. For these reasons, HFC’s DOPPL Insurance Program has minimum policy limits of $1,000,000 to respond to the catastrophic nature of environmental risk while maintaining low deductibles.
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