Wrong Place, Wrong Time – 2023 Industry Trends! 

A state filed suit against a manufacturing facility which is located nearby a community which is considered one of the most disadvantaged areas in the state. Neighborhoods and surrounding schools have reported noxious fumes and dangerous scrap metals piling in the area. The state’s suit alleged that the disadvantaged community shouldered the primary burden of the environmental hazards created by the manufacturing facility. 

Redevelopment professionals may encounter environmental risk that is often unknown and may result in costly fines. With the infrastructure bill passing in 2021, and project funding expected to increase in 2023, we are likely to see an increase in construction related claims. Consider this…

A contractor was demolishing a small overpass as part of a roadway expansion project when he encountered asbestos-containing materials (ACM). Proper controls and air monitoring were put in place, but a neighbor later complained that ACM dust had entered the HVAC system of their home. Testing of the HVAC system revealed small amounts of ACM dust. To remove it, filters at the neighboring property had to be replaced and the ducts required cleaning at a significant cost. A claim was made for the clean-up expenses and considerable legal fees were incurred.

An insured located in an industrial region with many other companies has been sued by a municipality that claims its drinking water supply was contaminated with PFAS as a result of the insured’s operations. To address the PFAS damage, the municipality demanded material compensation be paid for clean-up costs as well as installation fees to upgrade its water treatment system. Although the insured asserted that it did not use or involve any PFAS chemicals in its processes, unfortunately, extensive legal expenses to defend against litigation were incurred.

A few years after construction of the upscale apartment community, tenants complained about discovering mold in the bathrooms. Several tenants moved and filed claims for alleged bodily injury and property damage. An extensive investigation revealed that construction defects associated with shower installation caused severe water intrusion and moisture build-up. Damages to the property owner included loss of rent, clean-up cost and settlements with injured tenants.