Rail Car Refurbisher
A rail car refurbishing company was interested in acquiring a rail services company that included five rail car servicing facilities in three states. Our retail broker partner solicited New Day’s assistance to design a Pollution Legal Liability (PLL) program to address legacy as well as new environmental issues on, at, under or migrating from the properties. Although, an Environmental Indemnification was provided by the Seller, the indemnity language was limited in scope and duration. In addition, two of the locations were partially situated on or nearby Federal National Priorities List Superfund Sites. After New Day reviewed all of the environmental due diligence documentation, submissions were forwarded to several of the major environmental markets.
New Day negotiated a 5 year policy term excess and Difference in Condition (DIC) of the Environmental Indemnification Agreement, as well as coverage for Bodily Injury and Property Damage for known pollution conditions in soil and groundwater at several of the sites. The company’s Corporate PLL Policy includes a Voluntary Site Investigation exclusion that would preclude coverage in the event of a sale to a prospective purchaser if pollution conditions were found during the due diligence process. New Day placed the new 5-year policy without a Voluntary Site Investigation exclusion, a feature that was very important to the Insured even though they felt the Environmental Indemnity was providing sufficient protection.