The environmental marketplace is experiencing growth in terms of available carriers and new products. More choices and competitive prices provide an opportunity for agents to offer environmental coverage to existing clients and open a dialogue with potential clients about the importance of pollution insurance. When considering carrier relationships in this climate, it’s important to remember that price does not necessarily equal value.
The positive side of competition includes affordability, less restrictive requirements, and expansion of product offerings. Rates for many classes of business are down, in part, due to the influx of new players in the market. Additionally, requirements for quoting and binding have been reduced by some carriers. While ease of doing business is an important aspect in maintaining client relationships, carriers who offer inexpensive coverage without an adequate understanding of the risk may not be willing to pay out a claim in a timely manner or be able to provide support through the loss process.
Some qualities to consider when choosing a carrier include long term financial stability, experience with a class of business, and loss control services. Factors like the A.M. Best rating, experienced underwriters, and adequate staffing allow carriers to endure when others are exiting markets or going out of business.
We are seeing increased opportunities in the following areas: Premises Pollution/Environmental Impairment Liability, combined Contractors Professional/Pollution, and Fuel related products. Insureds with property risks requiring coverage for new pollution conditions to meet the terms of a lease or loan may be able to obtain fairly broad terms with premiums as low as $2,500. With these products carriers can offer multi-year terms, which is another important reason to partner with a carrier who will be there throughout the policy term.
Beacon Hill is teaming with our PartnerOne Environmental underwriting division to exclusively offer our Enhanced Fuel Solutions program which addresses the needs of businesses with unique premises specific exposures, including gas stations, auto dealer and repair risks, as well as coverage for various alternative fuel products. Examples of alternative fuel risks are electric car charging stations, biodiesel, natural gas, and propane storage. Coverage available includes Premises Pollution, Property, Equipment, and Inland Marine.
More carriers are also starting to provide a Contractors Professional and Pollution product for non-environmental contractors. We are seeing more contract requirements for both lines of coverage, and packaging these lines on one policy can reduce premiums and streamline the claims process. It’s important to keep in mind that many of our carriers are seeing increased losses on this line of business. As a result, carrier appetites have become more restrictive. Generally, these policies are not intended to compete with carriers covering primarily design-based risks, such as architects and engineers.
As always, be sure to review the coverage offered, compare policy forms, and the other determining factors we have mentioned above to select the appropriate carrier for your client. While competition can bring benefits, it is important to look into the stability of the company providing terms and their policy forms when selecting the best option for your client.