This week we are featuring 
In December 2011, John Walsh and Don Cleveland purchased the company and rebranded it as WaterColor Management. We spoke with Don, president of the company, about the driving forces behind the success of WaterColor Management in providing critical liability insurance for the industry. Don is a graduate of Creighton University, Omaha, Nebraska, with a B.A. in Journalism and Political Science, and has a Master's in Political Science from the University of Nebraska. He served in the U.S. Army for 10 years and worked in the legislative and lobbying field before beginning his career in the insurance industry in the late ‘70s when he started his own MGA. Don has successfully managed numerous insurance programs and worked as a consultant for WaterColor until purchasing it with John Walsh, chairman of WaterColor Management.
"We have the background to deal with the uniqueness of those in the water treatment industry," states Don. We know the industry, have had the most experience with companies that handle, treat or manage water, including those that maintain the quality of water in air conditioning, cooling towers, boilers, and septic operations, among others. WaterColor Management brings to the table the unique perspective of understanding what the industry does and has developed a policy that addresses and responds to the industry's needs."
In fact, WaterColor Management's policy is the most unique in the insurance industry, providing liability coverage to water treatment facilities. Don cites its General Liability policy, which includes Products & Completed Operations, along with its included Professional Liability, Pollution Liability EBL and EPLI coverages, as specifically developed for this niche. "Within the overall pollution risks, for example," Don explains, "we cover mold and bacteria exposure. We included this coverage 10 to 15 years ago as we knew that issues such as Legionnaires' disease would be a problem associated with the water treatment industry. Our policy is designed to provide defense coverage and indemnification if our insured is found negligent for bodily injury or property damage as a result of not having treated the water properly and an outbreak of Legionella occurs on their watch."
Defense coverage is critical for those in water treatment and management, notes Don, as the legal fees alone to defend an allegation can be significant due to the complexity of the issues involved. "The largest payment made in the 30-year history of the program involved defending a claim for a California-based company accused of improperly treating a water tower. Thirty-plus individuals working at the site allegedly acquired Legionnaires'. After DNA testing the court found that none of the indviduals had Legionnaires'. But the defense process in the claim involved $1 million in expenses - costs that could wipe out an insured's business."
Don provides other examples that underscore the not-so-black-and-white issues involved in the industry. "There was a case involving a prison system in which six people died from Legionnaires'. The water treatment company provided the formula for the types of chemicals to use, shipped the chemicals to the prison and provided a written plan to follow on how much biocide to use at specific intervals to treat the water. Upon investigation, it was discovered that the prison staff had not followed the instructions and allowed the Legionella bacteria to grow to a point that it was capable of giving people the disease or killing them. In this case, the water treater was found not to be responsible for the loss, and total responsibility rested with the prison system.
"In another case, a water treatment company had properly installed the equipment required and provided documented maintenance instructions to a facility including the doses needed to treat the water. There was an accident at the facility and a circuit breaker blew interrupting the dosing schedule. The facility's local management didn't check whether the dosing was still operational and an outbreak occurred. Responsibility lied with the local management, not the water treatment company."
WaterColor Management's expertise in the industry is indeed the hallmark of its success. "Oftentimes when we attend tradeshows in the water treatment industry, in talking with conferees, they will remark that they have never talked to anyone who understands what they do until meeting us," says Don. "This goes back to our specialty. It's extremely important to understand what they are doing to make sure they have the right coverage in the first place. It's also critical to understand the claim and the ramifications when a claim comes in - what's the responsibility of the insured to respond to that claim, and how do we handle it."
In addition to providing the underlying liability policies for water treatment and management companies, WaterColor Management also offers Excess coverage up to $10 million on an MGU basis. The specialized liability policies and Excess coverage is through Tokio Marine Specialty Insurance Company, which has rating of A++ XV from A.M. Best. The program is available nationally and is open access to agents.
WaterColor Management also offers a similar program for the sewer and septic tank industries. The company is actively seeking new agents to represent both programs and offers good commissions, fast turnaround times and a focus on reliable and responsive service.
For more information about WaterColor Management's program, please visit the website at www.watercolormanagement.com or contact Jack Bailey at (678) 595-9995 or via email at jbailey@watercolormanagement.com.