Stacy Brown of Freberg Environmental on how to talk to clients about their environmental liabilities, how often to revisit and reassess coverage, and provides tips for ensuring policy renewals in this fourth and final video installment on environmental insurance.
Video transcript below:
Brian Anderson, Managing Editor, Insurance Business of America
Brian Anderson: The customary rap on environmental insurance is that it’s a specialised product only purchased by companies with an exposure so obvious that they're legally required to carry some sort of cover. Ten years ago that might have been the case. Today however a combination of severe weather events, expensive lawsuits and highly publicised environmental risks are leading many smaller companies to consider their exposures and seek appropriate coverage. Insurance Business America recently visited the offices of Freberg Environmental Insurance in Denver to gain some insight on emerging trends as well as some opportunities for producers in this market. Freberg is a highly regarded specialist in developing, marketing and underwriting environmental insurance programs. We sat down with 20 year industry veteran, Stacy Brown, the President & Managing Partner of Freberg Environmental to get his take on the issues in this instalment of a four-part series.
What role should an agent play in an initial conversation about a client’s environmental liabilities?
Stacy Brown: I think they should just sit down and have a frank discussion, perhaps have some claim examples. It's very easy to find claim examples on the Internet if you have a facility that manages a certain type of material, you can certainly Google that material and environmental claim or environmental incident, you would probably find many many hits on web pages related to those types of operations. There are also other resources, US Environmental Protection Agency website and you can type in a zip code and it will list all the facilities within that zip code that have environmental permits, either hazardous waste permit, air permit, a Clean Water Act permit and from that you can determine whether or not those facilities are actively managing or are under one of the major environmental regulations. Those facilities clearly are candidates for Environment coverage.
How often should brokers revisit and reassess their clients in environmental coverage?
Stacy Brown: I think it should be a continual process. If you consider a contractor and certainly a number contractors have had a tough time in the past five or six years but now they're starting to ramp up again, their revenues are going up, they're doing more projects. I think it's time to sit back and take a good look at their operations, how much revenue they are driving and look at their pollution exposure and certainly recommend contractors pollution liability policy. Any kind of fixed facility also perhaps in a growth mode, those types of facilities may be actively managing more and more materials which may lead rise to a pollution claim. So I think it's just something that the insurance agent needs to keep tabs on their book of business and any type of operation where they are materially changing in size certainly would be something they need to have a frank discussion with their insured about it.
What are your tips for ensuring the policy renewal?
Stacy Brown: It's imperative for agents to sit down with their customer and make sure they have a very good understanding of what they are doing and certainly if a customer has increased the amount of contaminates or hazardous materials that they're managing, if that insured has implemented new safety procedures, if they've updated spill plans if they have updated permits, all those pieces of information are critical for underwriting those policies. The agent should collect those bits of information and provide them to the underwriter and that will help the underwriter better assess the risk and potentially better pricing for that particular account.
