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Contingencies
6 Months Ended
Jun. 30, 2015
Commitments And Contingencies Disclosure [Abstract]  
Contingencies

4. CONTINGENCIES

The Company carries insurance policies on insurable risks with coverage and other terms that it believes to be appropriate. The Company generally has self-insured retention limits and has obtained fully insured layers of coverage above such self-insured retention limits. Accruals for self-insurance losses are made based on claims experience. Liabilities for existing and unreported claims are accrued for when it is probable that future costs will be incurred and can be reasonably estimated.

As described in Note 7 — “Commitments and Contingencies” to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014,  Huttig was previously identified as a potentially responsible party in connection with the cleanup of contamination at a formerly owned property in Montana. The following information supplements and updates the Company’s prior disclosure. On February 18, 2015, the Montana Department of Environmental Quality (the “DEQ”) issued an amendment to the unilateral administrative order of the DEQ outlining the final remediation of the property in its Record of Decision (the “ROD”).  The Company submitted a work plan to the DEQ to implement the ROD and it is currently under review by the DEQ.  Under the ROD, the DEQ estimated the remediation costs of the property to be $8.3 million.  Based on the Company’s review of the ROD, including discussions with third-party specialists, the Company has accrued $3.7 million at June 30, 2015 and December 31, 2014 with respect to the contingent liability.  The Company believes this accrual represents a reasonable estimate of its expected remaining costs of remediation in light of current facts and circumstances.   However, the ultimate amount of remediation expenditures is difficult to estimate.  There is uncertainty regarding the implementation of the final remediation. As part of the remediation process, additional soil and groundwater sampling, bench and pilot testing is required to ensure the remediation will achieve the projected outcome required by the DEQ. The Company considered in its estimate, among other things, discussions with the DEQ, including the utilization of alternative remediation methods. Potential indemnification or other claims we may be able to assert against third parties and possible insurance coverage have also been considered but any potential recoveries have not been recognized at this time. Since the top end of the range of our potential remediation costs for the property is unknown, our actual remediation expenses ultimately incurred could exceed our accrual by a material amount which could have a material adverse effect on our future liquidity, financial condition or operating results in any period in which any such additional expenses are recognized.

On June 29, 2015, certain private plaintiffs owning properties adjacent to the Montana site sued the Company in the Montana Fourth Judicial District Court seeking remediation of the property in excess of what is contemplated by the ROD and other damages.  The Company has not yet been served, but plans to defend the lawsuit vigorously.

The Company has filed a declaratory action against certain liability insurers seeking, inter alia, defense and indemnification for the costs of implementing the final remediation activities associated with the Montana property and defense and indemnification costs associated with the related lawsuit described above.  This case currently is pending in the United States District Court for the Eastern District of Missouri.  A trial date has been set for August 21, 2017.

In addition, some of the Company’s current and former distribution centers are located in areas of current or former industrial activity where environmental contamination may have occurred, and for which the Company, among others, could be held responsible. The Company currently believes that there are no material environmental liabilities at any of its distribution center locations.

The Company accrues expenses for contingencies when it is probable that an asset has been impaired or a liability has been incurred and management can reasonably estimate the expense. Contingencies for which the Company has made accruals include environmental, product liability and other legal matters. It is possible, however, that actual expenses could exceed our accrual by a material amount which could have a material adverse effect on Huttig’s future liquidity, financial condition or operating results in the period in which any such additional expenses are incurred.