Environmental insurance is a type of coverage that is designed to fill coverage gaps created by pollution exclusions in liability and property insurance policies. While environmental coverage has been available since the late 1970’s, market penetration is still very low. According to the National Association of Insurance Commissioners (NAIC), one of the biggest hindrances to growing the market for environmental insurance seems to be agents and brokers themselves. Many agents and brokers are operating with technically inaccurate information, or not enough information at all, and can not properly address their clients’ questions about the need to buy environmental insurance.
Finding out what clients want to know about environmental insurance can help agents and brokers better educate, inform and ultimately protect their clients with adequate environmental liability coverage. Here are some of the most frequently asked questions surrounding environmental insurance.
Why should I buy environmental insurance?
This is one of the most common questions that clients have, and one of the easiest to answer. Since most commercial insurance policies contain pollution exclusions, clients can be left with significant gaps in coverage that can result in costly pollution-related losses.
Many business owners mistakenly believe that environmental insurance coverage is only meant for companies who deal with “hazardous waste,” and thus don’t think this is a necessary coverage for them. However, “pollutants” can include mold, bacteria, fungi, asbestos, lead or a number of other substances. In fact, the standard commercial general liability (CGL) policy, broadly defines pollution as “arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids, gases, waste materials or other irritants, contaminants or pollutants into or upon the land, the atmosphere or any watercourse or body of water.”
Not only are there many different types of pollutants, there are well over 100 different types of environment insurance policies designed to cover different environmental and industry-related risks. Buying environmental insurance often involves a bit more research and may even require multiple site studies before the policy can be written. This ensures that the client’s policy directly covers their environmental risk and they’re not paying for insurance that they don’t need.
Does environmental insurance have exclusions?
Although environmental insurance was created to address the pollution exclusions in other property and liability policies, it doesn’t come without its own exclusions. These will vary depending on the type of policy, but common exclusions can include:
- Damage that was intended or should have been reasonably expected by the insured;
- Damage to the insured’s own property;
- Bodily injury to any employee of the insured;
- Damages resulting from wilful non-compliance with the law;
- Damages resulting from unaddressed pre-existing pollution conditions.
How much does environmental insurance cost?
Like most liability insurance policies, the cost of environmental insurance can vary depending on certain circumstances. A client who has a clean jobsite and no previous environmental exposure will have a smaller premium compared to a client who has a known problem and previous losses. It’s important for agents and brokers to get as much information from their clients as they can before offering them a quote so that it can be as accurate as possible.
Environmental insurance can prove itself to be a profitable line of business for agents and brokers, if they are able to focus the time and resources necessary to ensure that they are knowledgeable and functional in all aspects of the coverage line. Partnering with a responsive and professional environmental insurance wholesaler that offers strong underwriting and marketing support can also help agents take advantage of the growing environmental insurance market.
Formed in 2013, AmSuisse, Inc. has quickly distinguished itself as a wholesale operation that specializes in working very closely with our agents and broker partners to develop responsive, individualized service for each client. Our unparalleled writing support, industry-specific expertise, marketing support, responsive proposals and quotes, strong customer service, and strong relationships with our carrier partners have all helped us to provide the best possible coverage for our clients. To learn more about our available coverage, contact us today at (800) 485-0229 to speak with one of our representatives.