System and method for evaluating liability

• US 6,336,096 B1
• Filed: 10/09/1998
• Issued: 01/01/2002
• Est. Priority Date: 10/09/1998
• Status: Expired due to Fees

• Current Assignee: Donald V. Jernberg
• Original Assignee: Donald V. Jernberg
• Inventors: Jernberg, Donald V.
• Primary Examiner(s): Hafiz, Tariq R.
• Assistant Examiner(s): KALINOWSKI, ALEXANDER G
• Application Number:
  US09/169,424
• Time in Patent Office: 1,180 Days
• Field of Search: 705/4, 705/1, 705/39
• US Class Current: 705/4
• CPC Class Codes: G06Q 10/30 Administration of product recycling or disposal
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: Y02W 90/00 Enabling technologies or technologies with a potential or indirect contribution to greenhouse gas [GHG] emissions mitigation

Abstract

A system and method of evaluating liability among multiple potential responsible parties (PRPs), their insurers and multiple environmental sites supports mediating and arranging settlements in toxic site cleanup between PRPs and insurers, and in appropriate cases, settlements of one or more underlying environmental claims. The system eliminates fragmentation in effecting settlements and handles the interdependence among the parties. According to the system and method, data is gathered, relationships among the data are calculated, a coverage law adjustment factor is applied to the data, allocation and choice of law principles are applied, groupings among the multiple parties and sites are identified based on the apparent settlement potential as identified through the system'"'"'s various relationships, and a qualitative decision pertaining to the likelihood of outcome is proposed to the parties within the identified groupings.

Claims

1. Apparatus for evaluating environmental liability among a potentially responsible party (PRP), having a plurality of insurers arising from a legal liability of the PRP at an environmental site, comprising:

a site database which stores data pertaining to an estimated total cost of cleaning up the site;

a PRP database which stores data pertaining to the PRP'"'"'s allocated amount of liability;

an insurer'"'"'s database which stores data pertaining to a PRP'"'"'s time of coverage and limits of liability under a policy with the insurer;

a PRP liability relationship routine for determining a set of liability relationships among the PRP, the insurers and the site;

a PRP liability relationship database which stores PRP liability relationship data resulting from execution of the relationship routine;

a settlement database which stores confidential settlement data of the PRP'"'"'s and the insurers pertaining to offers of settlement; and

an anticipated liability routine for determining an anticipated liability among the PRP and the insurers in response to a state adjustment factor pertaining to an adjustment of an insurer'"'"'s liability with respect to a coverage obligation based on a selected state'"'"'s laws and the settlement data and for generating an output based upon the divergence of the adjusted relationship data from the settlement data.

2. The apparatus of claim 1, wherein the state adjustment factor comprises a number from 0 to 100%.

3. The apparatus of claim 1 wherein the site database stores a total anticipated cleanup costs at the site and a period of involvement and wherein the PRP database stores the PRP'"'"'s percentage of total volume amount of pollution at the site and the PRP'"'"'s period of involvement at the site.

4. The apparatus of claim 1 wherein the PRP database stores data for a plurality of PRPs.

5. The apparatus of claim 4 wherein at least one of the PRPs comprises a de minimis PRP.

6. The apparatus of claim 1 wherein the insurer database stores data for a single insurer and the PRP database stores data for a plurality of PRPs.

7. The apparatus of claim 3, wherein the relationship routine calculates the PRP'"'"'s volumetric dollar amount of liability, wherein the PRP'"'"'s volumetric dollar amount is the product of the PRP'"'"'s percentage of total volume amount times the total anticipated cleanup costs.

8. The apparatus of claim 7 wherein the relationship routine calculates the PRP'"'"'s allocated dollar amount of liability, wherein the allocated dollar amount comprises the sum of the PRP'"'"'s volumetric dollar amount of liability and a proportionate share of uncollectible shares which are allocated among a group of other, remaining PRPs at the site.

9. The apparatus of claim 3, wherein the relationship routine calculates the insurer'"'"'s percent time on risk (TOR) coverage, wherein the TOR coverage is the ratio of the PRP'"'"'s time of coverage under a policy with the insurer within the PRP'"'"'s total period of involvement at the site to the PRP'"'"'s total period of involvement.

10. The apparatus of claim 9, wherein the relationship routine calculates the TOR allocated dollars, wherein the TOR allocated dollars is the product of the TOR coverage and the PRP'"'"'s allocated amount of liability.

11. The apparatus of claim 10, wherein the relationship routine calculates the TOR volume dollars for each PRP, wherein the TOR volume dollars is the product of the TOR coverage and the PRP'"'"'s percentage of total volume amount times the total anticipated cleanup costs.

12. The apparatus of claim 11, wherein the anticipated liability routine calculates the insurer'"'"'s adjusted allocated dollars, wherein the insurer'"'"'s adjusted allocated dollars is the product of the TOR allocated dollars times the state adjustment factor.

13. The apparatus of claim 12, wherein the anticipated liability routine calculates the insurer'"'"'s adjusted volume dollars, wherein the insurer'"'"'s adjusted volume dollars is the product of the TOR volume dollars times the state adjustment factor.

14. The apparatus of claim 13, wherein the anticipated liability routine compares the greater of the insurer'"'"'s adjusted allocated dollar amount and the insurer'"'"'s adjusted volume dollar amount, to the insurer'"'"'s offer of settlement to generate an output representing an offer adjusted allocated or volumetric dollar deviation.

15. The apparatus of claim 1 further comprising a choice of law routine for determining which state law shall be used in determining which state adjustment factor to apply.

16. The apparatus of claim 14 wherein the PRP'"'"'s offer to pay toward settlement is subtracted from the product of the greater of the PRPs volumetric or allocated dollar liability times (100% minus the state adjustment factor) to generate an output representing the PRP'"'"'s adjusted dollar deviation.

17. The apparatus of claim 14 wherein the dollar deviations for each insurer are expressed in percentages by dividing the dollar deviation amount of the insurer by the greater of the adjusted allocated or volumetric dollar amount calculated by the liability routine for each such insurer.

18. The apparatus of claim 16 wherein the PRP'"'"'s dollar deviations are expressed in percentages by dividing the dollar deviation amount of the PRP by the greater of the adjusted allocated or volumetric dollar amount calculated by the liability routine for the PRP.

19. The apparatus of claim 1 further comprising a routine for allocating liability among multiple insurers of a single PRP/policyholder with respect to an environmental liability which may impact or trigger multiple years of insurance coverage.

20. Apparatus for evaluating environmental liability among a potentially responsible party (PRP), having a plurality of insurers, arising from a legal liability at an environmental site, comprising:

a database which stores data pertaining to an estimated total cost of cleaning up the site, the PRP'"'"'s allocated amount of liability, for each insurer, the PRP'"'"'s time of coverage and limits of liability under a policy with the insurer, and confidential settlement data of the PRP and the insurers pertaining to offers of settlement;

a PRP liability relationship routine for determining a set of liability relationships among the PRP, the insurers and the site;

wherein PRP liability relationship data resulting from execution of the relationship routine is stored in the database; and

an anticipated liability routine for determining an anticipated liability among the PRP and the insurers, in response to a state adjustment factor pertaining to an adjustment of an insurer'"'"'s liability with respect to a coverage obligation based on a selected state'"'"'s laws and the settlement data and for generating an output based upon the divergence of the adjusted relationship data from the settlement data.

21. The apparatus of claim 20, wherein the state adjustment factor comprises a number from 0 to 100%.

22. The apparatus of claim 20 wherein the database stores a total anticipated cleanup costs at the site, a total period of involvement at the site, the PRP'"'"'s percentage of total volume amount of pollution at the site and the PRP'"'"'s period of involvement at the site.

23. The apparatus of claim 20 wherein the database stores data for a plurality of PRPs.

24. The apparatus of claim 23 wherein at least one of the PRPs comprises a de minimis PRP.

25. The apparatus of claim 20 wherein the database stores data for a single insurer and data for a plurality of PRPs.

26. The apparatus of claim 22, wherein the relationship routine calculates the PRP'"'"'s volumetric dollar amount of liability, wherein the PRP'"'"'s volumetric dollar amount is the product of the PRP'"'"'s percentage of total volume amount times the total anticipated cleanup costs.

27. The apparatus of claim 26 wherein the relationship routine calculates the PRP'"'"'s allocated dollar amount of liability, wherein the allocated dollar amount comprises the sum of the PRP'"'"'s volumetric dollar amount of liability and a proportionate share of uncollectible shares which are allocated among a group of other, remaining PRPs at the site.

28. The apparatus of claim 22, wherein the relationship routine calculates the insurer'"'"'s percent time on risk (TOR) coverage, wherein the TOR coverage is the ratio of the PRP'"'"'s time of coverage under a policy with the insurer within the PRP'"'"'s total period of involvement at the site to the PRP'"'"'s total period of involvement.

29. The apparatus of claim 28, wherein the relationship routine calculates the TOR allocated dollars, wherein the TOR allocated dollars is the product of the TOR coverage and the product of the PRP'"'"'s allocated amount of liability.

30. The apparatus of claim 29, wherein the relationship routine calculates the TOR volume dollars for each PRP, wherein the TOR volume dollars is the product of the TOR coverage and the PRP'"'"'s percentage of total volume amount times the total anticipated cleanup costs.

31. The apparatus of claim 30, wherein the anticipated liability routine calculates the insurer'"'"'s adjusted allocated dollars, wherein the insurer'"'"'s adjusted allocated dollars is the product of the TOR allocated dollars times the state adjustment factor.

32. The apparatus of claim 31, wherein the anticipated liability routine calculate the ingurer'"'"'s adjusted volume dollars, wherein the insurer'"'"'s adjusted volume dollars is the product of the TOR volume dollars times the state adjustment factor.

33. The apparatus of claim 32, wherein the anticipated liability routine compares the greater of the insurer'"'"'s adjusted allocated dollars and the insurer'"'"'s adjusted volume dollars, to the insurer'"'"'s offer of settlement to generate an output representing an offer adjusted allocated or volumetric dollar deviation.

34. The apparatus of claim 20 further comprising a choice of law routine for determining which state law shall be used in determining which state adjustment factor to apply.

35. The apparatus of claim 33 wherein the PRP'"'"'s offer to pay toward settlement is subtracted from the product of the greater of the PRPs volumetric or allocated dollar liability times (100% minus the state adjustment factor) to generate an output representing the PRP'"'"'s adjusted dollar deviation.

36. The apparatus of claim 35 wherein the dollar deviations for each insurer are expressed in percntages by dividing the dollar deviation amount of the insurer by the greater of the adjusted allocated or volumetric dollar amount calculated by the liability routine for each such insurer.

37. The apparatus of claim 35 wherein the PRP'"'"'s dollar deviations are expressed in percentages by dividing the dollar deviation amount of the PRP by the greater of the adjusted allocated or volumetric dollar amount calculated by the liability routine for the PRP.

38. The apparatus of claim 20 further comprising a routine for allocating liability among multiple insurers of a single PRP/policyholder with respect to an environmental liability which may impact or trigger multiple years of insurance coverage.

39. A method for evaluating environmental liability among a potentially responsible party (PRP), having a plurality of insurers arising from a legal liability at an environmental site;

comprising;

gathering site data pertaining to an estimated total cost of cleaning up the site;

gathering PRP data pertaining to the PRP'"'"'s allocated amount of liability;

gathering insurere'"'"'s data pertaining to a PRP'"'"'s time of coverage under a policy with the insurer;

calculating a set of liability relationships among the PRP data, the insurers data and the site data;

gathering confidential settlement data of the PRP and insurers pertaining to offers of settlement; and

calculating an anticipated liability among the PRP and the insurers, comprising applying a state adjustment factor, wherein the state adjustment factor corresponds to an adjustment of a PRP'"'"'s liability with respect to an insurer'"'"'s obligation based on a state'"'"'s laws, to the relationship data and comparing the adjusted relationship data with the settlement data.

40. The method of claim 39 further comprising the step of providing a qualitative recommendation of a likelihood of outcome based on the calculated anticipated liability.

41. The method of claim 39 further comprising the step of gathering data pertaining to a total anticipated cleanup costs at the site, a total period of involvement at the site, the PRP'"'"'s percentage of total value amount of pollution at the site and the PRP'"'"'s period of involvement at the site.

42. The method of claim 39 further comprising the step of applying the liability relationships and the anticipated liability among the PRP'"'"'s and the insurers to calculate an anticipated allocation of an insurance premium for an insurance policy covering the anticipated liability.

43. The method of claim 41 further comprising the step of calculating the PRP'"'"'s volumetric dollar amount of liability, wherein the PRP'"'"'s volumetric dollar amount is the product of the PRP'"'"'s percentage of total volume amount times the total anticipated cleanup costs.

44. The method of claim 43 further comprising the step of calculating the PRP'"'"'s allocated dollar amount of liability, wherein the allocated dollar amount comprises summing the PRP'"'"'s volumetric dollar amount of liability and a proportionate share of uncollectible shares which are allocated among a group of other, remaining PRPs at the site.

45. The method of claim 44 further comprising the step of calculating the insurer'"'"'s percent time on risk (TOR) coverage, wherein the TOR coverage is the ratio of the PRP'"'"'s time coverage under a policy with the insurer within the PRP'"'"'s total period of involvement at the site to the PRP'"'"'s total period of involvement.

46. The method of claim 45 further comprising the step of calculating the TOR allocated dollars, wherein the TOR allocated dollars is the product of the TOR coverage and the product of the PRP'"'"'s allocated amount of liability times the estimated total cost.

47. The method of claim 46 further comprising the step of calculating the TOR volume dollars for each PRP, wherein the TOR volume dollars is the product of the TOR coverage and the PRP'"'"'s volumetric dollar amount.

48. The method of claim 47 further comprising the step of calculating the insurer'"'"'s adjusted allocated dollars, wherein the insurer'"'"'s adjusted allocated dollars is the product of the TOR allocated dollars times the state adjustment factor.

49. The method of claim 48 further comprising the step of calculating the insurer'"'"'s adjusted volume dollars, wherein the insurer'"'"'s adjusted volume dollars is the product of the TOR volume dollars times the state adjustment factor.

50. The method of claim 49 further comprising the step of comparing the greater of the insurer'"'"'s adjusted allocated dollar amount and the insurer'"'"'s adjusted volume dollar amount, to the insurer'"'"'s offer of settlement to generate an output representing an offer adjusted allocated or volumetric dollar deviation.

51. The method of claim 39 further comprising the step of determining which state law shall be used in determining which state adjustment factor to apply.

52. The method of claim 50 further comprising the step of subtracting the PRP'"'"'s offer to pay toward settlement from the product of the greater of the PRPs volumetric or allocated dollar liability times (100% minus the state adjustment factor) and generating an output representing the PRP'"'"'s adjusted dollar deviation.

53. The method of claim 52 further comprising the step of expressing the insurer'"'"'s dollar deviation in percentages by dividing the dollar deviation amount of the insurer by the greater of the adjusted allocated or volumetric dollar amount calculated by the liability routine for each such insurer.

54. The method of claim 53 further comprising the step of expressing the PRP'"'"'s dollar deviations in percentages by dividing the dollar deviation amount of the PRP by the greater of the adjusted allocated or volumetric dollar amount calculated by the liability routine for the PRP.

55. The method of claim 39 further comprising the step of allocating liability among multiple insurers of a single PRP/policyholder with respect to an environmental liability which may impact or trigger multiple years of insurance coverage.

56. Apparatus for evaluating environmental liability among a potentially responsible party (PRP), having a plurality of insurers, arising from a legal liability at an environmental site, comprising:

a database which stores data pertaining to an estimated total cost of cleaning up the site, the PRP'"'"'s allocated amount of liability, for each insurer, the PRP'"'"'s time of coverage and limits of liability under a policy with the insurer, and confidential settlement data of the PRP and the insurers pertaining to offers of settlement;

a PRP liability relationship routine for determining a set of liability relationships among the PRP, the insurers and the site;

wherein PRP liability relationship data resulting from execution of the relationship routine is stored in the database;

an anticipated liability routine for determining an anticipated liability among the PRP and the insurers, in response to a state adjustment factor pertaining to an adjustment of an insurer'"'"'s liability with respect to a coverage obligation based on a selected state'"'"'s laws and the settlement data and for generating an output based upon the divergence of the adjusted relationship data from the settlement data; and

a computer having a CPU for executing the PRP liability relationship routine and the anticipated liability routine and a memory for storing the database.

57. The apparatus of claim 56, wherein the state adjustment factor comprises a number from 0 to 100%.

58. The apparatus of claim 56 wherein the database stores a total anticipated cleanup costs at the site, a total period of involvement at the site, the PRP'"'"'s percentage of total volume amount of pollution at the site and the PRP'"'"'s period of involvement at the site.

59. The apparatus of claim 56 wherein the database stores data for a plurality of PRPs.

60. The apparatus of claim 58 wherein at least one of the PRPs comprises a de minimis PRP.

61. The apparatus of claim 56 wherein the database stores data for a single insurer and data for a plurality of PRPs.

62. The apparatus of claim 58, wherein the relationship routine calculates the PRP'"'"'s volumetric dollar amount of liability, wherein the PRP'"'"'s volumetric dollar amount is the product of the PRP'"'"'s percentage of total volume amount times the total anticipated cleanup costs.

63. The apparatus of claim 62 wherein the relationship routine calculates the PRP'"'"'s allocated dollar amount of liability, wherein the allocated dollar amount comprises the sum of the PRP'"'"'s volumetric dollar amount of liability and a proportionate share of uncollectible shares which are allocated among a group of other, remaining PRPs at the site.

64. The apparatus of claim 63, wherein the relationship routine calculates the insurer'"'"'s percent time on risk (TOR) coverage, wherein the TOR coverage is the ratio of the PRP'"'"'s time of coverage under a policy with the insurer within the PRP'"'"'s total period of involvement at the site to the PRP'"'"'s total period of involvement.

65. The apparatus of claim 64, wherein the relationship routine calculates the TOR allocated dollars, wherein the TOR allocated dollars is the product of the TOR coverage and the product of the PRP'"'"'s allocated amount of liability.

66. The apparatus of claim 65, wherein the relationship routine calculates the TOR volume dollars for each PRP, wherein the TOR volume dollars is the product of the TOR coverage and the PRP'"'"'s volumetric dollar amount.

67. The apparatus of claim 66, wherein the anticipated liability routine calculates the insurer'"'"'s adjusted allocated dollars, wherein the insurer'"'"'s adjusted allocated dollars is the product of the TOR allocated dollars times the state adjustment factor.

68. The apparatus of claim 67, wherein the anticipated liability routine calculates the insurer'"'"'s adjusted volume dollars, wherein the insurer'"'"'s adjusted volume dollars is the product of the TOR volume dollars times the state adjustment factor.

69. The apparatus of claim 68, wherein the anticipated liability routine compares the greater of the insurer'"'"'s adjusted allocated dollar amount and the insurer'"'"'s adjusted volume dollar amount, to the insurer'"'"'s offer of settlement to generate an output representing an offer adjusted allocated or volumetric dollar deviation.

70. The apparatus of claim 56 further comprising a choice of law routine for determining which state law shall be used in determining which state adjustment factor to apply.

71. The apparatus of claim 69 wherein the PRP'"'"'s offer to pay toward settlement is subtracted from the product of the greater of the PRPs volumetric or allocated dollar liability times (100% minus the state adjustment factor) to generate an output representing the PRP'"'"'s adjusted dollar deviation.

72. The apparatus of claim 71 wherein the dollar deviations for each insurer are expressed in percentages by dividing the dollar deviation amount of the insurer by the greater of the adjusted allocated or volumetric dollar amount calculated by the liability routine for each such insurer.

73. The apparatus of claim 72 wherein the PRP'"'"'s dollar deviations are expressed in percentages by dividing the dollar deviation amount of the PRP by the greater of the adjusted allocated or volumetric dollar amount calculated by the liability routine for the PRP.

74. The apparatus of claim 56 further comprising a routine for allocating liability among multiple insurers of a single PRP/policyholder with respect to an environmental liability which may impact or trigger multiple years of insurance coverage.