Postponing Tuesday night’s Knicks game not only prevented fans from watching their team but kept fans away from Madison Square Garden. The N.Y. Knicks game was postponed due to suspicion that asbestos related material was falling from the rafters at Madison Square Garden.
The last minute cancellation of Tuesday night’s game highlights how important risk considerations are with construction or capital improvement projects. There are loss of revenue issues and potentially direct damage losses all stemming from what was believed to be an Asbestos (environmental) cause. Such issues are generally excluded from most standard property and liability policies which highlights this occurrence. Understanding risk and coverage is a challenge to begin with but especially challenging when under public pressure. The potential reputation risks abound as well, with even the hint of concern to frequent a location, the result can be devastating for future business.
This event highlights how a thoughtful risk management review may have prepared the “owner” for financial consequences from such an event. While Environmental Insurance is widely available, it is often misunderstood and passed over if a lender or other stakeholder doesn’t mandate its purchase. Both direct and consequential loss along with protecting the Insured from third party claimants is available from the environmental insurance marketplace today. Although the N.Y. Department of Environmental Protection found no traces of asbestos, the Knicks franchise and MSG still may suffer several negative consequences that could have been mitigated through adequate risk review.
Joseph Boren, CEO of Ironshore Environmental highlights that asbestos scare “…underscores the needs for both contractors and real estate owners to carry environmental insurance. In the absence of such coverage, liable parties will find they almost certainly do not have insurance coverage”.
A proper Risk Management Assessment (RMA) can surface such risks and offer suggestions for their mitigation. As independent insurance consultants we are continually working with our clients on identifying such issues to lower their Total Cost of Risk (TCoR).
Please let us know if we can help with any issues you may face on a construction or capital improvement project.
If you need more information on any of the topics covered in this blog, or need help with any risk related issues please contact Albert Sica, Managing Principal, at 732.395.4251 or [email protected].
