Environmental insurers continue to expand their product offerings by including not only environmental insurance products, but casualty products such as General Liability, Excess liability, Products Liability, and Commercial Auto. In addition, a large target market for environmental insurers has become the non-environmental contractor. More of an emphasis is being placed on making sure that contractors have Professional Liability coverage as well as Contractors Pollution Liability coverage since the lines are often blurred between professional and operational activities when a pollution event occurs.

As these product expansions are taking place, carriers are also focusing on new environmental offerings that target specific industries or address specific environmental risk issues. For example, recent program developments have included products associated with energy, agricultural sectors, and indoor air quality/mold issues.

Many carriers have pulled back on the terms for Site Pollution products, i.e., it is getting more difficult to write a 10-year Site Pollution policy. The level of uncertainty with regard to regulatory, science, and the public’s awareness of environmental risk has never been higher, making it more difficult to quantify and qualify long term environmental risks.

Although the energy sector has been adversely impacted by declines in gas prices, premiums for environmental products available to this sector have remained stable.

Regulatory Changes that May Impact Insureds

The EPA is enhancing the use of technology and the awareness of the public to increase their ability to address the most critical environmental issues. With increased technology, it is anticipated that there will be more information sharing across federal and state boundaries, leading to enhanced enforcement activity. In addition, this will give the public and the plaintiff’s bar more information to form the basis for increased litigation with respect to environmental matters.

Recent announcements from the EPA support the fact that there is an increase in environmental regulatory activity. Examples of this include:

• At the end of 2014, the EPA announced the first national regulations to provide for the safe disposal of coal combustion residuals (coal ash) from coal-fired power plants. The final rule is meant to ensure that coal ash impoundment failures, groundwater impacts, and air emissions from activities associated with coal ash are prevented.
  
• The EPA is in the process of proposing new regulations for the management and disposal of hazardous waste pharmaceuticals which are generated by healthcare facilities. The rule will include a notification and tracking system in accordance with the Resource Conservation and Recovery Act (RCRA) generator requirements.
  
• The EPA is expected to issue its final Guidance documents with respect to vapor intrusion in 2015 which will mandate how to investigate, assess, and clean up vapor intrusion conditions. This could, once again, cause regulators to reopen sites that had previously been closed where a “no further action” letter had previously been issued.
  

What Should Agents Watch Out For?

Agents should be having discussions with their clients about their environmental risk management strategies, specifically in light of new federal and state environmental regulatory initiatives. With increased compliance monitoring and public information comes more scrutiny. How insureds are responding to regulators and the public should be a talking point during renewal meetings. The environmental insurance market continues to be competitive and carriers have numerous enhancements that can be added to an insured’s environmental programs such as:

• Defense outside the limits (for contractor programs).
  
• Green building enhancements.
  
• Coverage for newly acquired entities with no need to schedule them onto policy forms for a certain period of time.
  

In addition, some carriers will provide training on various environmental risk topics such as mold management, often at no cost to the insured.