From massive, multi-billion-dollar construction sites to the gas station on the corner, businesses of all sizes and types may have a need for environmental coverage – but it’s an area that continues to be underinsured, says an expert.

Marc LeBrun, vice president of Construction and Environmental Insurance at ENCON Group Inc. says that while there has been an uptick in companies purchasing the coverage in recent years, it’s often an overlooked area for businesses.

“There are still quite a few that are foregoing it and choosing not to buy it, likely based purely on cost or feeling that they don’t have a need for it,” he says.

“That’s always a challenge for us – it’s just getting that education out there.”

He adds that brokers in the space are wise to provide potential clients with real-life claims examples as evidence of the need for environmental coverage, pointing to the Deepwater Horizon oil spill that occurred in the Gulf of Mexico in 2010.

“I think those types of events really triggered people into thinking of protecting the environment, and this type of coverage, whether it’s the end user buying the policy, or a government agency, or an owner having work done,” he says.

“It’s protecting the name on the door – when these large events happen, it gets into the media and whether it’s in print or social media or online publications, your name’s out there – the bigger benefit is just to have that protection.”

He adds it’s “paramount” that clients choose an insurer or broker who “really understands the exposure”, and to explore their options, as the space becomes more competitive than in the past.

 “A broader sense of the challenge associated with the coverage is in the past, premiums were fairly high for the coverage, especially for higher limits,” he says. “Today, there are more and more companies that are writing environmental liability, so there’s more competition. Premiums have softened a bit and with that, there are more clients purchasing the coverage, so there’s likely to be an increase in claims moving forward.”


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