Abstract
While the ultimate cost of cleaning up the nation's inactive hazardous waste disposal sites may be beyond the resources of corporate American and its liability insurers, their ongoing contributions to this task can be assured only if they can predict and plan for these outlays.
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) deprives both potentially responsible parties (PRP's) and their insurers of predictability essential to business planning. CERCLA's liability rules and cleanup standards impose costs so potentially ruinous as to compel PRP's and their insurers to expend millions in efforts to shift or evade them.
On the assumption that neither Congress nor the Supreme Court is likely to resolve the escalating PRP-insurer fight over insurance coverage for cleanup obligations, this paper argues that only a voluntary resolution of their differences will permit PRP's and their insurers to bring efficiency, fairness and predictability to the process of financing an important national objective. It proposes some principles and procedures around which a settlement of the coverage disputes, and a predictable, “pay-as-you-go” system for financing cleanups, might be built.
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*A paper prepared by Leslie Cheek, III Senior Vice President-Federal Affairs, Crum & Forster Insurance Companies, for a Conference on Risk Assessment and Risk Management Strategies for Hazardous Waste Storage and Disposal Problems sponsored by The Geneva Association and The Risk and Decision Processes Center, The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania, May 18–19, 1988.
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Cheek, L. Insurance Issues Associated with Cleaning up Inactive Hazardous Waste Sites. Geneva Pap Risk Insur Issues Pract 14, 120–148 (1989). https://doi.org/10.1057/gpp.1989.10
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DOI: https://doi.org/10.1057/gpp.1989.10