How will the full-implementation of the LSRP Program in NJ affect insurers? Will total remedial costs go up or down? How might the rate of spending change? The answer lies in how well insurers manage their exposures under the new Site Remediation Reform Act (SRRA). If managed and executed properly, contaminated sites in New Jersey can be cleaned up more efficiently and more cost effectively than in the past.
The long-awaited Licensed Site Remediation Professional (LSRP) program in New Jersey was fully implemented on May 7, 2012. SRRA created this new program whereby LSRPs will supervise and sign off on the remediation of contaminated sites in New Jersey. Since the LSRP has to sign off on the final remediation, they are now responsible for the final selection of remedial actions that are deemed protective of human health and the environment.
The potential exists for cost to be ignored by the LSRP in selecting remedial options – as a result of:
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Lack of skill/knowledge/experience;
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An overly conservative approach or
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Simply does not consider cost a major factor in the decision process.
Roux Associates, Inc. has already seen instances where other environmental consulting firms have selected prohibitively expensive, overly conservative remedial options when less costly, equally effective options are available. Clearly, selection of a low cost but ineffective remedy is inappropriate. However, selection of the most cost effective of the available, protective remedies is desirable.
What does this mean for third-parties that are footing the bill for a remediation that is managed by others? Are these third-parties at the mercy of the LSRP? How can insurers ensure that its money is spent most wisely to achieve a protective and cost effective remedy?
First, get involved early on to understand the overall project strategy, timing and execution. Does it make sense? If not, one option is to retain an independent third-party LSRP (i.e., one that does not work for the consulting firm doing the remediation) that will oversee the work of the responsible party’s environmental consultants. This may be appropriate in some, but not all circumstances. Another option is to have the responsible party retain an LSRP of your choosing since the insurance company is paying for the work. This option may prove beneficial in situations where the incumbent environmental consultant apparently lacks the ability to effectively guide the project to closure. Finally, in certain circumstances where there is a fundamental difference of opinion, the incumbent environmental consultant may need to be replaced by an LSRP retained by you.
Roux Associates, Inc. currently has six LSRPs and a two-decade long relationship with the insurance industry. We recognize the need for timely remedial strategies that are protective and fulfill all legal requirements, but that achieve site closure in a cost-effective manner.
If you have a dry cleaner, gas station, commercial, industrial, manufacturing or other type of site in New Jersey, we would be glad to review it with you and discuss how the LSRP program may impact you. Contact your Roux Associates, Inc. representative at: 856-423-8800 or contact one of our experts directly:
Pat Penders - Vice President: ppenders@rouxinc.com
Tom Buggey - Principal Hydrogeologist: tbuggey@rouxinc.com
