Still leery of selling environmental risk insurance? Don’t be, says one insurer, who likens today’s coverage to the property and casualty space.
“It is not dangerous. Once the broker takes the time to look at our wordings and look at the triggers, they will find that we are very much like a casualty-based form,” says Ricardo Philip, AVP national product line leader for environmental risk, Markel Canada. “The wordings are very ISO-driven in its essence. But we also give first-party discover, which is like a property-type of coverage.”
It was only a few years ago that environmental risk coverage was viewed by clients as being an expensive extra, and insurers and brokers alike saw market as a niche with very deep waters indeed.
But times have changed, says Philip.
“Once most brokers get to see what the marketplace gives, and the all the coverage enhancements that are available to them, they see it is a viable coverage to sell,” he says. “When I started in this business in the mid-1990s, $1 million worth of underground storage tank coverage was a very expensive proposal. Now you can buy that coverage from a number of carriers, and the price is less than $1,000. It has evolved immensely, and the pricing is affordable.”
Most clients realize there are still very niche coverages and companies that have high premiums, but on the whole, the marketplace is in step with current coverages, says Philip.
“There is a lot of nervousness among brokerages ,” he says, “but more and more we see not just alpha brokerages but, brokers in general finding that one key executive who can look at those coverages and be the point of referral internally – and we deal with those people all the time.”
Philip says that over the years at Markel, they’ve had the ability to underwrite contractors’ traditional environmental impairment liability; but have also had the ability to write the general liability for those classes of clients that – very often – environmental liability is a no-go for CPL markets.
“So we are able to take on the general liability in concert with the environmental coverages,” he says, “and write them together, providing a real total solution for the client.”
“If you provide an environmental contractor with contract solution liability, comprehensive general liability and E&O, you are really providing them with the whole package”, adds Philip.
“Not many other markets are able to do that,” he says, “in addition to providing dedicated limits to all three coverages, as very often, markets will choose to provide one combined limit.”