Atlanta Injury Attorneys Blog

Last year we published a blog entry regarding the importance of notices of commencement and non assignment clauses to general contractors. Both properly filed notices of commencement and non assignment clauses in general contracts and subcontracts can limit the number of entities able to assert viable lien claims. In the first instance, a properly filed notice of commencement renders it incumbent upon second tier sub contractors and material suppliers to properly serve a notice to contractor or risk losing their lien rights. In the second instance any sub subcontractor or material supplier which performs labor for or supplies materials to a prime subcontractor with a non assignment clause in its primary contract must be made known to the general contractor or owner or they too may not be able to assert any lien. (See O.C.G.A. 44-14-365.1(b) and Benning Construction Company v. Dykes Paving, 263 Ga. 16, 426 S.E. 2d 564). As such the proactive project owner or general contractor can set up roadblocks designed to limit exposure to having to pay twice for the same services.

What happens if despite your best efforts and best practices a lien or liens are nonetheless properly filed? A procedure afforded by the revisions made to the Georgia lien statutes can often be effective in defeating even liens which are properly filed. Georgia now allows an Owner or Contractor to file a "Notice Of Contest Of Lien" to shorten the time period a lien claimant has to sue to perfect its claim of lien. The Notice includes the following directive aimed at the lien claimant after some preliminary language identifying the lien being challenged: The above referenced lien will expire and be void if you do not: (1) commence a lien action for recovery of the amount of the lien claim pursuant to O.C.G.A. Section 44-14-361.1 within sixty days from receipt of this notice: and (2) file a notice of commencement of lien action within 30 days of filing the above referenced lien action. A copy must be sent by certified or registered mail or statutory overnight delivery to the lien claimant at the address listed on the lien within seven days of filing and proof of delivery must also be recorded with the superior court clerk. If no Notice Of Commencement Of Lien Action has been filed within 90 days of the filing of the Notice Of Contest the lien becomes extinguished by of law.
Since the amendments to the Georgia lien laws we have filed several Notices Of Contests Of Lien on behalf of Owners. In every case the lien claimants have failed to then follow the statutory steps necessary to perfect their liens and those liens have become void saving our client owners and general contractors significant sums of money.

What constitutes an occurrence and covered resulting property damage in the arena of construction defect claims has been the source of pervasive litigation nationwide in recent years. A 2011 ruling by The Supreme Court Of Georgia clarified this issue to some degree and should be carefully studied both by Claimants and Insurers.

In American Empire Surplus Lines Insurance Company v. Hathaway Development Company, Inc. 288 Ga. 749, 707 S.E. 2d 369 decided March 7, 2011, The Supreme Court Of Georgia upheld The Georgia Court Of Appeals reversal of a trial court's decision (Hathaway Development Company, Inc. v. American Empire Surplus Lines Insurance Company, 301 Ga. App. 65, 2009). In that case, improperly performed plumbing work contributed to extensive damage to three different projects. The general contractor sued the plumbing subcontractor and was successful in recovering from the plumber's Commercial General Liability (CGL) policy. The latter opinion is a must read for participants in construction claims and contains a broad discussion of many of the issues which arise when a damaged party seeks to recover from a CGL policy. At the trial court level the Insurer had persuaded the court that its CGL policy did not cover the damages caused by its insured (the plumbing subcontractor) for a wide variety of reasons including the business risk exclusion. The business risk exclusion essentially stands for the proposition that an insurer does not insure risk of loss to its insured's own work. If an insured contractor performs its work negligently or deficiently the replacement or repair cost of that work is not an insured risk. But what about damages sustained as a result of improperly performed work? That is where the opportunity for recovery exists for the alert and careful claimant and where the risk of loss is to the insurer. We have been successful both in defeating claims on behalf of insurers by presenting a claimant's damages in such a way that they were subject to one or more exclusions and in recovering for claimants by understanding the intricacies of where, when and how to present construction defect claims in order to trigger coverage. While it may seem obvious, for CGL coverage to apply the claims brought must be grounded in negligence and not breach of contract. I have seen this error made many times by counsel not well educated or experienced in this area of the law.

Essentially, in the Hathaway case, the general contractor claimant succeeded in doing two things. First it succeeded in presenting its claims as resulting damages, in other words not damages to the plumber's own work, thus avoiding the business risk exclusion. Second it succeeded in characterizing the plumbers' negligent work as a covered "occurrence" under the CGL policy. The insurers argument had been that the negligence of its insured in performing its own work was not covered because the acts were intentional, and not accidents. The Supreme Court saw it differently saying "A deliberate act, performed negligently, is an accident if the effect is not the intended or expected result; that is, the result would have been different had the deliberate act been performed correctly."

Understanding the manner in which construction defect claims are addressed by the courts and how CGL policies on construction projects are interpreted is absolutely essential in the effective representation of claimants and insurers alike.

In early March 2012, the Georgia legislature passed House Bill 994, which includes an amendment to the Hazardous Site Reuse and Redevelopment Act, O.C.G.A Section 12-8-202(b)(6), commonly referred to as the Georgia brownfields law. The amendment provides that a purchaser of property is no longer required to apply for participation in the brownfields program prior to the purchase of property, at which there has been a regulated release; rather, the purchaser has up to thirty days after acquiring title to the property to apply for brownfields protection. Further, the amendment of section 208(c) makes the limitation of liability received by a purchaser automatically applicable to future title holders, rather than simply transferable to such parties. Finally, changes to the law were made so that, in certain circumstances, existing brownfield purchasers would have an additional up to fifteen years to recover the tax benefits, which is an increase of five years from the current provisions

Each of these amendments were intended to address concerns of purchasers and sellers and facilitate more transactions associated with environmentally impacted properties. It is anticipated that Governor Deal will sign the legislation into law. In the ever shifting climate of environmental regulation it is crucial for developers and owners to be aware of the rules applicable to real property and to have access to experienced counsel in that regard.

It has become common practice in the construction industry today for General Contractors to seek to include in any agreement with a Project Owner a clause requiring a mutual waiver of claims for consequential damages. In fact, such a clause has been a standard component of the AIA form construction contracts for well over a decade. But why can a clause purporting to be a mutual waiver of claims against each other in fact be anything but mutual and in reality, vastly to the advantage of the General Contractor? The reason is that consequential damages to which a Project Owner could be exposed are almost always going to be far, far greater than any to which the General Contractor could be exposed. Counsel experienced in these and other issues important to participants in the construction industry is crucial to both General Contractors and Owners alike.

Consequential damages are damages which do not result immediately and directly from a wrongful act but rather arise indirectly and as a consequence of that act. By way of example, if a General Contractor delays completing an industrial project by a month the immediate damage to the Project Owner may simply be a 30 day delay in being able to recommence operations. The indirect or consequential damage suffered by the Owner could be the loss of a multi million dollar supply contract because the Project Owner was unable to recommence production in time to fulfill the terms of an order for its products. Were there a mutual waiver of consequential damages clause in the construction contract for this particular hypothetical example the Project Owner could well have to absorb this multi million dollar loss itself even though the damages were caused entirely by the General Contractor's negligence or breach of contract.

From a General Contractor's perspective however such a result does not seem so unreasonable. If the value of the construction contract is one million dollars and the General Contractor expects to realize a profit of ten percent or one hundred thousand dollars why should it be willing to undertake the risk of a potential fifty or hundred million dollar liability? Clearly any General Contractor who would assume such a risk is making a significant gamble. The General Contractor will almost always be well advised to insist on a mutual waiver of consequential damages.

If the Owner and the General Contractor cannot agree on the inclusion or exclusion of such a clause the best practice is for the parties to define and quantify the extent of the risk and then insure against it. The attorneys at Sweetnam & Schwartz LLC have extensive experience in the crafting of construction industry agreements from the perspectives of both Project Owners and General Contractors. Both Parties owe it to themselves to ensure that any project undertaken is done so pursuant to well written contracts with clearly defined responsibilities and identified risks.

In the current economic environment it is more important than ever that Project Owners and General Contractors be proactive in ensuring that their projects remain lien free and that payments they issue are properly applied to outstanding debts for labor and materials. This issue has previously been discussed in our Blog concerning notices of commencement and non-assignment clauses.

Proactively filing the requisite notices and mandating the inclusion of non-assignment clauses in contracts can help to reduce the risk associated with improper allocation of funds paid on a project. What do you do however, when a subcontractor executes a lien waiver and then absconds with the money leaving sub subcontractors and material suppliers unpaid? An Owner or a General Contractor can at least preserve the possibility of some additional protection in this situation by requiring that in addition to the statutory lien waiver forms, an affidavit of payment also be signed. The lien waiver forms required by the changes to the Georgia lien statutes which became effective in 2009 do not include any affirmative representation that subcontractors or material suppliers of the payee have been paid. Since the statute requires that lien waiver forms must substantially conform to the requirements set forth in the statute, it is inadvisable to alter the form of the waiver to include this representation. Rather, the better practice would be to have the payee execute both a lien waiver AND an affidavit that all subcontractors and material suppliers either have been paid or will be paid from the funds paid pursuant to the waiver. This is a practice that Sweetnam & Schwartz recommends to all our construction industry clients.

While the affidavit itself may not prevent an unscrupulous subcontractor from falsely swearing and diverting funds to itself instead of paying its suppliers, it may allow for personal liability on the part of the affiant thus giving the Owner or GC some additional recourse. In essence, executing an affidavit which the signer knows to be false can amount to fraud, an action that may not be protected by the corporate shield. If a subcontractor's president or owner knowingly provides a false affidavit in order to obtain money then that individual may be become personally liable for the losses suffered by the Owner/GC, in addition to the subcontracting entity itself. In the case of Peters v. Imperial Cabinet Company 189 Ga. App. 337 (1988) the Georgia Court Of Appeals specifically recognized a cause of action for false swearing as set forth in O.C.G.A. 51-1-6. In that case the owner of a residential general contracting company executed an affidavit in conjunction with the sale of a home which falsely set forth that all outstanding debts for labor or materials had been paid. The Court held under these circumstances that "Appellee's allegationthat Appellant knowingly swore falsely, thereby injuring Appellee, set forth a cause of action for brach of the legal duty to swear truthfully."

The Importance Of Notices Of Commencement And Non Assignment Clauses To The General Contractor

One of the most pressing concerns for a General Contractor on any project is to avoid the exposure associated with subcontractors and material suppliers filing liens against the Owner's property. One way to do this is to properly file a Notice Of Commencement. The requirements of the notice are detailed in O.C.G.A. 44-14- 365.1(b). Properly and timely filed, the Notice requires all second tier subcontractors and suppliers to in turn serve a Notice To Contractor on the General Contractor in order to preserve their lien rights. Even if those second tier subcontractors and suppliers properly serve the Notice To Contractor at least the General Contractor now knows the identity of these entities and can take steps to protect itself.

It is equally important for the pro active General Contractor to also include a non assignment clause in all of its subcontracts specifically prohibiting any entity it contracts with from assigning any portion of the work without the General Contractor's specific written permission. This has two advantages in Georgia. First, it forces first tier subcontractors to identify second tier subcontractors and suppliers to the General Contractor. Again, so long as the General Contractor knows these entities exist it can take steps to protect itself. Second, any failure by the first tier subcontractor to comply with this requirement can cause an unidentified sub subcontractor or material supplier to lose its lien rights thus again, protecting the General Contractor. In a 1993 decision of The Supreme Court Of Georgia ( Benning Construction Company v. Dykes Paving, 263 Ga. 16, 426 S.E. 2d 564) the Court was faced with the question of whether a lien filed by a supplier to an unknown second tier subcontractor was valid. The Court observed that the second tier subcontractor and supplier were unknown to the General Contractor. Further, the sub subcontract between Benning's subcontractor and its in turn sub subcontractor was in violation of the anti assignment clause in Benning's subcontract. Consequently the Court determined that the material supplier which filed the lien was not "in a direct chain of contracts" with the General Contractor as required by O.C.G.A. 44-14-361(b) and NOT ENTITLED TO LIEN RIGHTS.

The pro active General Contractor will take all available steps to protect itself from exposure to unanticipated claims and to the risk of having to pay for work twice. The construction attorneys at Sweetnam & Schwartz, LLC have extensive experience in assisting General Contractors in avoiding claims through the use of pro active front end contracting and project management techniques.

Adequate Insurance Coverage

Most Americans are badly underinsured. Imagine you are sitting at a red light and a drunk driver slams into you from behind causing you serious and debilitating injuries. The negligent driver who hit you has only minimal insurance coverage (or possibly none at all). You have $50,000.00 in medical bills and your claim in the hands of skilled personal injury counsel is worth several hundred thousand dollars. What do you do? The negligent driver's coverage, say $25,000.00, won't even cover half of your medical bills much less compensation for your injuries.

Because situations like the one described above happen everyday, it is essential that you procure uninsured (or underinsured) motorist coverage. This is coverage you purchase under your own automobile coverage. It protects you if you are injured by someone with little or no insurance. Uninsured motorist coverage works like this. Say you have $250,000.00 in uninsured motorist coverage. The driver who injured you has only $25,000.00 in liability coverage. In that situation your uninsured coverage will pay up to a total of $225,000.00 to you in compensation for your injuries. The amount of available liability coverage is always offset against the amount of uninsured coverage you have.

Check with your insurance agent to make sure you have adequate liability coverage and just as importantly uninsured or underinsured coverage. Maintaining at least $250,000.00 in liability and uninsured coverage is recommended. If you or a member of your household is badly injured by a driver with no or minimal insurance there is a real possibility that you will not be able to recover adequate compensation for your medical bills, injuries and lost wages. It is very important to maintain appropriate uninsured motorist coverage in order to avoid being left with no way to recover your losses if you are injured by an uninsured or underinsured driver.

While so called tort reform rhetoric continues to be heard from politicians especially among republicans, the reality in the marketplace stands in stark contrast to the claims being made by the advocates for reform. Major insurance companies continue to routinely deny claims in bad faith. According to badfaithinsurance.org, Allstate and State Farm are consistently among the worst insurers. Many insurers may adopt a practice of routinely denying legitimate claims knowing that the majority of claimants will not fight the practice and simply go away. In this way a bad faith insurer will save millions of dollars. The few claimants who fight the practice will barely make a dent in the amounts wrongfully withheld from legitimate claimants. When dealing with a bad faith insurer it is very important to be represented by experienced and aggressive injury attorneys in order to maximize your opportunity of overcoming bad faith conduct and recovering the sums a claimant is entitled to recover.

Neither is there any truth to the myth that massive insurance premium increases are related to the amount of claims being paid out. To the contrary, study after study has proven that insurers continue to raise their rates without regard to the volume of claims.

When bringing a claim for injuries against most major insurers it is important to remember that the insurer increases its profits by not paying claims. Aggressive representation by an experienced lawyer is essential. The law firm of Sweetnam & Schwartz, LLC can provide the aggressive and experienced representation required in pursuing legitimate claims.

If you have been in an accident and have no medical health insurance there is a real and substantial risk that any settlement or verdict you obtain could be dramatically reduced by outstanding debts to medical providers. It is essential to be represented by an experienced Georgia injury attorney when dealing with medical providers.

Under Georgia law a medical provider such as a doctor's office or a hospital has the ability to place a lien against a victim's case (cause of action), the proceeds of any settlement or verdict and the victim's legal representative (attorney) for unpaid medical bills. The law setting forth the medical providers' lien rights is codified at O.C.G.A. 44-14-470. This statute presents a real problem for an accident victim without insurance since it purports to create a lien at the moment treatment is rendered. Further, the lien is not subject to the argument that the plaintiff-victim has not been fully compensated for his or her injuries. Holland v. State Farm Mutual Automobile Insurance Company 244 Ga. App. 583 (2000).

The best course of action is to work out an arrangement with the medical provider in advance so that the attorney and the medical provider are supportive of each other's efforts. When the victim's attorney is also regarded as an advocate for the provider it is far more likely that the provider will be willing to substantially reduce the size of its lien. Obviously the greater the discount agreed to by the medical provider the greater the recovery remaining for the client.

In a speech given on January 13, Assistant Attorney General Ignacia Moreno addressed 2011 priorities for the Environment and Natural Resources Division of the US Department of Justice. Ms. Moreno stressed the commitment of the Division to strong enforcement of all environmental laws to ensure the protection of air, water, and other natural resources, as well as the health of all Americans. She further touted the Division's 2010 successes: securing over $6.5 billion in injunctive relief in civil cases; collecting over $81 million in civil penalties and stipulated penalties; recovering $725 million for Superfund expenditures; obtaining commitments for over $750 million for hazardous waste remediation; and concluding 50 criminal cases against 79 individuals resulting in 28 years of imprisonment and $89 million in fines and restitution. The Division is committed to building upon these significant achievements.

In 2011, the Division will continue its support of an aggressive EPA civil and criminal enforcement program. The Division will prioritize enforcement under the Clean Air Act's New Source Review Program, including company-wide settlement of these actions; municipal sewage and stormwater treatment and collection cases under the Clean Water Act; cleanup of hazardous waste sites under the Comprehensive Environmental Response Compensation and Liability Act; criminal enforcement, especially with regard to the worker safety initiative to combine environmental and workplace practices; vessel pollution and falsification of ship environmental records; illegal trafficking of wildlife and plants; promotion of environmental justice awareness, policies and ongoing efforts; and the defense of EPA regulatory programs including greenhouse gas emissions.

One would think that in this struggling economy, the government would prioritize compliance assistance with over enforcement of environmental laws. This logic, however, does not resonate in Washington, DC. Instead, EPA and the Division appear intent upon stepping up civil and criminal enforcement of environmental laws against businesses and individual officers responsible for environmental compliance for the business. Companies must, therefore, be more diligent than ever in addressing potential issues under all applicable federal and state environmental laws and regulations. As the consequences of failing to do so may be significant, it is more important than ever that businesses and responsible corporate officers seek experienced environmental attorney in the event of a potential violation of environmental laws and regulations.

There have been a number of changes made to the requirements for properly filing and perfecting a construction lien in Georgia. This legislation took effect on March 31, 2009. Experienced construction counsel should always be consulted when seeking to properly enforce a contractor's lien.

1. The lien form itself has been altered in two respects. First, the lien must now include the following language in 12 point bold font:
THIS CLAIM OF LIEN EXPIRES AND IS VOID 395 DAYS FROM THE DATE OF FILING OF THE CLAIM OF LIEN IF NO NOTICE OF COMMENCEMENT OF LIEN ACTION IS FILED IN THAT TIME PERIOD.

Second, the lien must include a notice to the property owner that it has the right to contest the claim of lien. The new legislation fails to specify the required language. Suggested language is as follows:
PURSUANT TO THE PROVISIONS OF O.C.G.A. 44-14-361.1(a)(2) THE OWNER IDENTIFIED ABOVE HAS THE RIGHT TO CONTEST THIS CLAIM OF LIEN.

2. Time periods for filing and for taking various notification steps in the process of lien perfection have also been changed. Liens must now be filed of record within 90 days (not three months) of the time the last work was done or material supplied to the project. The legislation fails to specify what the "last work" means.
The safest practice is to calendar your lien period from the last day you were performing "original scope" work on the project. Some contractors have tried to sidestep this requirement by performing punch list or repair work and claiming that was the "last work". That is a dangerous practice in that cases have held that the performance of punch list or repair work will not extend the time available to file a lien.

Continue reading "Perfecting Construction Liens In Georgia" »

Directors and officers are being held liable at an increasing rate for violations of environmental laws and regulations by their corporations. A recent case, in which our Atlanta environmental law firm was involved, from a federal court in Georgia demonstrates the ever-widening scope of personal liability of corporate officers.

In Draper v. Roberts, a case of first impression, the U.S. District Court for the Northern District of Georgia ruled that individual officers could be held personally liable for the violations of the corporation under the Clean Water Act (CWA). In imposing such liability the Court determined liability principally on the basis that the corporate individuals had the capacity to prevent the violations at issue. Thus, an owner or operator of a company in Georgia can be personally liable if that officer has the authority to direct the activities causing or constituting the violations facility has the the power to direct the activities of persons who control the mechanisms causing the violation.

Other jurisdictions that had addressed the imposition of personal liability upon corporate officers in the context of the CWA held that the CWA does not impose personal civil liability for prohibited acts simply by virtue of an individual's corporate position. These courts have generally found corporate officers to be personal liable under the CWA only when they have extensively participated in or were directly responsible for the statutorily proscribed violative conduct.

In the Draper case, the Plaintiffs alleged that the corporate defendant, a small development company, caused sedimentation into their lakes in violation of the CWA. They further alleged that the two individuals that owned and operated the company were liable personally for the violations. The defense contested personal liability on the basis that the individuals lacked actual control over the activities that caused the alleged violations. As it only engaged contractors (i.e. grader and home builder) to perform the land disturbance and other construction work alleged to have caused the sedimentation on the Plaintiffs' properties, the individual defendants did not direct or control any activities that caused any alleged violation of the CWA.

While agreeing that personal liability cannot be based on corporate status alone, the Court found that both individual had sufficient responsibility for and control over the construction and erosion control at the property subdivision to be held individually liable for the violations of the CWA. Specifically, the Court noted that one defendant was the managing partner who made all decisions for the company that was the primary permittee under the CWA, monitored activities of the contractors and subcontractors, observed erosion and sedimentation control practices and recorded rainfall data. The other defendant was the person that signed the Notice of Intent, thereby holding himself out as an officer of the company, and designating himself as facility contact, and that certified the Erosion, Sedimentation, and Pollution Control Plan, indicating that it would be implemented in compliance with the CWA. Both officers corresponded regularly with regulatory entities regarding violation notices regarding activities at the property. The Court determined that these largely misiterial tasks constituted significant responsibilities related to compliance with erosion and sedimentation control measures and best management practices, violation of which caused damages to the Plaintiffs.

Moreover, the Court held the individuals responsible for their failure to correct violations stating the violations that are the subject of the lawsuit were "at least partly a consequence of their actions or, more importantly, their omissions". According to the Court, the individuals did not perform the work, but were "ultimately responsible for the performance of the work". Therefore, under the precedent set by this case, an officer of a company that fails to ensure compliance with the CWA, is just as liable as if the individual had directed the violation of the CWA.

In a lawsuit in which this environmental law firm participated, the US District Court for the Northern District of Georgia held that a property manager of a shopping center, although not liable as an owner, was liable as an operator of a hazardous waste disposal facility under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA),42 U.S.C §§ 9601 et seq., and the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§6901 et seq.

The case, Scarlett & Associates v. Briarcliff Center Partners, 2009 WL 3151089 (ND Ga. 2009), involved a dry cleaning facility that had caused hazardous waste contamination of a shopping center in Atlanta. The owner leased the shopping center. The interest of the lessee was assumed by a bank, which hired Faison & Associates (Faison) to manage the property on its behalf. Faison managed the property for approximately two years, between September 1995 and September 1997, when the bank sold the lease. The shopping center was listed on the Georgia Hazardous Site Inventory in 1996. Scarlett & Associates (Scarlett), the principal lessee that acquired the shopping center from the bank, sued several past and present operators seeking contribution for remediation costs incurred at the shopping center. Scarlett alleged that Faison was an operator of a facility under CERCLA and was an operator of a hazardous waste treatment, storage, or disposal facility under RCRA. Further, Scarlett claimed that Faison was in violation of RCRA permit or other requirement based on the continued presence of contamination at the shopping center, even though Faison had ceased management of the property many years earlier.

Holding Faison liable as an operator under CERCLA and RCRA, the court concluded that there was sufficient evidence that Faison managed, directed or conducted operations specifically related to pollution. Specifically, the court noted that Faison (i) informed the dry cleaner of certain EPA requirements; (ii) requested documentation that the dry cleaner was in compliance; and (iii) was generally responsible for managing and maintaining the shopping center and performing all acts necessary to effect the bank's compliance with the laws. Because of these actions, the court concluded that Faison was an operator in violation of RCRA and, therefore, potentially liable for a continuous or ongoing violation by having failed to remedy the past contamination.

It seems counter-productive to hold property managers responsible for contamination that pre-existed their management of the property, especially where the property manager does not participate in the violation and/or cause the contamination. Indeed, this decision is contrary to holdings in other jurisdictions that no valid claim exists against prior operators under the citizen suit provision of RCRA.

Regardless, recognizing this precedent, property managers in Northern District of Georgia would be well advised to take the following precautions to prevent RCRA liability from their operations:

• Avoid performing management activities related to pollution;
• Avoid leasing to tenants with potential environmental issues;
• Insert provisions in management contracts for owner assumption of responsibility for environmental conditions at the property, whether known or unknown;
• Insert provision in management contracts for owner responsibility for compliance with environmental laws and regulations by owner and tenants;
• Insert provision in management contracts for owner indemnification for environmental claims not caused by property manager;
• Avoid leasing to tenants with environmental issues; and
• Ensure proper insurance for environmental claims.