Groundwater is currently regulated at the state level and not considered a federal pollution point source. The pending U.S. Supreme Court case County of Maui v. Hawaii Wildlife Fund seeks to change that.
In County of Maui, The 9th Circuit court most recently ruled that when a local farm discharged pollutants from its wells into the Pacific Ocean, the well water was a point source of pollution and therefore should be regulated under the Clean Water Act, which requires a National Pollution Discharge Elimination System (NPDES) permit.
The U.S. Environmental Protection Agency (EPA) agrees, arguing that concentrated pollution in groundwater discharged into navigable waters should be regulated.
The counterargument is that underground waters, like well water, ponds or catchment basins on farms are not point sources of pollution. They aren’t the typical discharges the Clean Water Act contemplates that come from factories or other industry, and Congress didn’t intend to regulate farms and ranches in this way.
The EPA has regulated point source pollution above ground for decades and the NPDES permits have become a part of the business planning for many industries. If the 9th Circuit opinion is upheld, permitting will be required of farms and agribusinesses as well, adding additional and significant costs and administrative work to nearly every farming or ranching operation across the U.S.
The Supreme Court heard arguments in the case on November 6, 2019 and is expected to deliver a decision in the coming months of 2020.
Is your agribusiness covered for pollution liability?
Pollution, or environmental, insurance is a supplemental coverage designed to fill in the gap created by a pollution exclusion present in 98% of commercial liability policies.
Pollution insurance is not a standard insurance policy. Instead, farms, ranching operations and agribusinesses must work with a broker to include a wide definition of “pollutant” and to ensure the policy provides adequate coverage for their business’ specific risks.
A well-negotiated pollution policy will cover both first- and third-party damages arising out of the release, escape or dispersal of an irritation or contamination event at the site of the policy. This includes liability for bodily injury, property damage, clean-up expenses, damage to natural resources, defense costs, civil fines and penalties and damage to natural resources. Business interruption costs can be added with extensions as well. Most site pollution policies exclude pre-existing conditions.
Ahead of the outcome of County of Maui, make sure your farm or agribusiness is covered for potential pollution liabilities today. Contact your HUB Agribusiness expert for more information on securing the right pollution policy for your organization.