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Don’t be surprised by environmental problems

For 30 years ending in 1977, General Electric discharged PCB pollutants into the Hudson River. In 1969 the Cuyahoga River in Ohio caught fire. Happily, industry has become mindful regarding its impact on the environment since those days.

To assist with your own company’s mindfulness, I have outlined a five-step program to help identify and remediate environmental hazards:

Step 1: Learn to separate business hazards from risks

To properly identify business hazards you must first differentiate between a “risk”’ and a “hazard.” Risk measures the potential harm that will occur. A hazard could cause physical harm. A wet floor is a risk. It becomes a hazard when someone walks on it.

You can identify environmental hazards in a number of ways. These include taking a walk inside and outside your workplace, asking employees to list hazards through face-to-face meetings or through anonymous suggestion boxes, staff workshops, discussions with peers and reading trade publications. Of course, hiring a professional risk expert will always be a good idea.

Step 2: Decide who might be harmed by environmental hazards and how they might be harmed

After identifying environmental hazards at your workplace, the next step is to understand whom they might harm and how.

Step 3: Evaluate environmental hazards and choose control measures

After identifying environmental hazards, you must determine how to protect those at risk of being harmed. One obvious action is to remove hazards that can be reasonably eliminated. Again, I recommend you enlist the assistance of professionals.

Step 4: Make a physical record of your findings

Record and share findings with affected members of the organization when it is appropriate. By documenting how you plan to either eliminate hazards or reduce the risk of their occurrence, you will have a physical record that you have identified the hazards, decided who could be harmed and also executed a plan to eliminate or mitigate the hazards.

Step 5: Periodically review and update your assessment

Change is constant. This is true of your physical workplace, environmental factors including climate, the condition of machinery and systems, new or improved technology, employee skill level and experience, supply chains and clients. Consequently, you must regularly review and update your risk assessment.

Here are ten situations that could lead to pollution-related exposures for your business.

1. An air compressor fails and the operating hydraulic fluid leaks, contaminating property and/or causing bodily injury to a third party.

2. An ammonia refrigeration system leaks, causing a disruption of operations or those of a third-party facility, causing a shutdown.

3. A nearby facility has a chemical leak, causing the company to shut down for several weeks until the environmental regulators deem it safe for employees to return to work.

4. A product is ingested causing a bodily injury or hypersensitivity allegation.

5. A product “contaminates” another’s product or another’s manufacturing equipment.

6. Process wastewater runs into a nearby stream.

7. A fire at your facility creates smoke and a terrible odor, causing the surrounding residential neighborhood to allege impairment and file multiple lawsuits.

8. Dust from a cyclonic collecting tower is released, causing alleged bodily injury to a third party, as well as extensive property damage. The U.S. Environmental Protection Agency also mandates a cessation of operations during the cleanup process, which severely disrupts revenue.

9. A residential facility or nursing home fields complaints of mold or Legionella, which lead to lawsuits alleging bodily injury, the shutdown of the fa10Paint, or some other type of liquid substance (pollutant), runs off a facility into a nearby drain or stream.

A trusted insurance broker can guide you regarding environment risk management and transference to insurance products.

Brian Heun is the sales and relationship manager and a partner at KMRD Partners Inc., a risk and human capital management consulting and insurance brokerage firm with offices throughout Pennsylvania. He can be reached at bheun@kmrdpartners.com.

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