WTC environmental insurance FEMA reimbursement status inquiry, July 2002

NYC 9/11 Public Portal Document

I Subject: World Trade Center Issues

I. Insurance

Confirming what I reported orally this AM, we have checked with our insurance contact (Dan Lavoie of Marsh McLennan; 212-345-7078) and he reports as follows: 1. The Environmental Markets do not want to touch the additional CGL coverage we are looking for, so Dan canvassed the excess markets (firms such as Zurich and Lexington). They will provide the $50MM CGL in excess of the $50MM to be provided through the contractor, on an occurrence form, for a cost of approx. $1 Million-$1.5 Million. 2. Environmental Liability Coverage through AIG:

AIG is prepared to offer us two options. Option A is straight Contractors Pollution Liability Coverage - which they described as a straight contractors form WITHOUT professional coverage (merely for the contractor’s operations). This would be for $90MM in excess of the $10MM to be provided by the contractor, for 3 years on a CLAIMS MADE form with a $250,000 deductible per claim, for a one-time premium of $400,000. Option B is Contractors Pollution Liability Coverage WITH professional coverage (where they believe the bulk of the exposure is: “you said it was clean, but it was not”). This would be for $90MM in excess of the $10MM to be provided by the contractor, for 3 years on a CLAIMS MADE form with a $250,000 deductible per claim, for a total premium of $2.7 Miilion-$4.5 Million (exact quote would be subject to underwriting review of the final contract form and the contract values). An extended reporting period MAY be available for a period of 90 days to 3 years for an additional premium (this would need further discussion with the carrier, including final contract form and contract values). II. EPA Work above 79”’ Street

I spoke with Bob Avaltroni, our D/C for Environmental Compliance, and he advises as follows: We are only doing asbestos downtown because that is the only air contaminant of concern where there is an EPA standard at present. EPA is doing tests uptown to try to get info, on background levels of other substances, to eventually set standards for these substances. Having successfully convinced EPA to take the lead and manage the cleaning program on asbestos downtown. Bob is loathe to open up the scope of work again for fear that this will cause EPA to reconsider the program/their role.

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