[CPEO-BIF] VI and Environmental Insurance

[Bruce-Sean Reshen <reshen@mindspring.com>]

A comment on Sue Neuman's remarks.  Sue is correct that many of the
issues surrounding reopeners and failed engineering controls and institutional
controls could be solved by thorough underwriting and use of EC and IC
insurance.  The risk that such controls are improperly implemented
can be mitigated by a rigorous review of the IC Implementation Plan by
both the regulatory authorities and the insurer.  Better to catch
any error or inadequacies before the plan is implemented.  Likewise
the risks associated with inadequate monitoring, maintenance and reporting
can be mitigated by such measures as 1)a mandatory review of the EC and
IC O&M Plans by both the regulatory authorities and the insurer; and
2)an in place program of frequent inspection, monitoring and reporting
by neutral third parties.  I note that the only major program of IC
insurance mandates such third party monitoring and reporting as a prerequisite
to obtaining the IC insurance.

However, none of the above measures would protect a developer against risks not associated with the in place IC Implementation Plan and IC O&M Plan.  Thus, the unfairness of saddling the developer with the costs associated with VI issues when such issues were never raised in the original remediation requirements.  Again, developers should be willing and able to deal with VI risks in new projects going forward.  They have no such ability to deal with VI risks on closed sites where such risks were not addressed in the original remedial design.  It would be counter productive the burden them with these costs retroactively.

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