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Elizabeth Pullen, producer/broker at Allied American Underwriters (AAU), has been in the industry for 31 years. She ended up in the environmental specialty because she found herself leaning towards more complex risks and exposures.
“I have always gravitated towards more in depth policy language and understanding the contract itself,” she said. She went from commercial lines into specialty lines, and spent eight years working on professional liability for medical accountants and lawyers before getting into architects and engineers, which led her to environmental insurance.
With decades of experience, she shakes her head at the education that many insurance professionals are missing when they dip their toes in the growing environmental market. In this Q&A, she shares insight on her specialty, pollution exclusions, and advice to brokers hoping to get into the growing environmental insurance business.
Pollution under a policy is defined basically as an irritant or a contaminant, so with that definition, almost anything can be an irritant or a contaminant, and general liability policies that are in the market exclude coverage for pollution. They have what’s called a total and absolute pollution exclusion, so if you have a general liability policy and it has a total and absolute pollution exclusion, you have no coverage for any bodily injury caused by an irritant or a contaminant. It leaves a tremendous gap in a general liability policy, for both a products perspective, and from a bodily injury and property damage perspective.
The carrier always gives you just what they want to give you, so they send back a quote for contractors’ pollution liability, and they think, ‘great, I have my quote,’ and [pass it onto the client]. The problem is the environmental forms are not standardized, like a GL form would be. Every carrier’s products vary because they’re carrier-specific so what you buy from one carrier may be completely different than the same product that you buy from another carrier. If you buy CPL from one, it may include XYZ and if you buy it from somebody else, it may exclude that XYZ. That’s true across the board.
So, the biggest problem is people think because the accessibility is there and it’s growing and everybody wants to participate, these carriers give more and more people access to it, but they don’t have the expertise to be writing it correctly.
