Is a 10-year insurance policy sufficient for the clean-up project?
Yes. The insurance market is presently offering a 10-year policy term for environmental clean-up projects that are similar in size and scope to NPDC. Special counsel to the Township has recommended, and the Township Committee concurs, that the 10-year policy is reasonable to cover the life of the clean-up project. The field work associated with clean-up is projected to take between 18 to 24 months. Thereafter, Weston is required to obtain a “No Further Action” letter indicating that the clean-up has been completed and that no additional clean-up is required. The insurance is the secondary risk management tool the Township has employed here. The Township’s environmental liability transfer agreement transfers clean-up obligations and other risk to Weston. That transfer is not contingent on the insurance policy. The duties transferred to Weston and its obligation to indemnify the Township is not limited to the 10-year life or the dollar limits of the insurance policy coverage. ___________
