How much coverage is enough? For those clients who are signing off on major projects, they may not realize just how far their liability extends – especially when it covers to environmental exposures.
“Not everyone fully appreciates what professional services are, where they begin and where they end,” says Ricardo Philip, AVP national product line leader for environmental risk, Markel Canada. “Obviously if you are a true engineer, you are a traditional approver, stamper of plans.”
While they may understand that they are taking on liability by putting their signature on a project, they may not fully understand the scope of that liability, says Philip.
“You sign off on behalf of the company as an officer, taking on that liability – that is where people really understand it,” he says. “But you know, in a routine fashion, smaller firms provide that service and they need that coverage, and you don’t want an uncovered loss to be the means you find out, leaving you to say, ‘Shoot, I should have had that coverage in place!’”
Having a broker explain to the client the coverages, and what coverages are required to meet each criteria, is crucial.
“At the pace that our clients are running and operating their business, very often they don’t understand that when they sign off on a contract and don’t take the time to read the fine print, what they are actually doing is certifying that the work has met a very large set of criteria,” says Philip. “You need that coverage in place to make sure you don’t have a large financial loss, in the event a project becomes highly contentious.”
Understanding the exposures that are out there requires a deep knowledge of the market, he adds, something that Markel has developed and nurtured over the years.
“Markel is if not the oldest insurer, then one of the first insurers of environmental risk in Canada,” says Philip, “having been in the marketplace since 1986.”
For existing clients, it is recommended that brokers constantly revisit existing policies and work practices by the client, to ensure that they are full covered.
“Environmental exposures have profoundly outstripped the coverage provided in the standard Commercial General Liability (CGL) policy, requiring a wide range of specialty pollution coverage options to provide protection in this dynamic area of commercial liability,” he says. “Even if you haven't recommended pollution cover to a client in the past, it makes sense to re-examine the pollution exposures of your client on a regular basis.”