Only 2% of insurance buyers have the environmental insurance they need - SEIP

Only 2% of insurance buyers have the environmental insurance they need - SEIP | Insurance Business

Only 2% of insurance buyers have the environmental insurance they need - SEIP

The Society of Environmental Insurance Professionals (SEIP) has named a new president who plans to continue advancing SEIP’s mission to educate brokers, agents and carriers on the namesake product and flip the dismal environmental insurance market on its head.

According to SEIP and its leader, Angela Dybdahl Oroian (daughter of David Dybdahl – famed environmental insurance broker), “After 30 years of continuous product availability and extremely cheap pricing, today only about two out of a 100 insurance buyers has the environmental insurance they need to fill coverage gaps created by pollution/fungus/mold/bacteria/category three water exclusion.”

Part of the problem is the lack of education around environmental insurance from the various sources that brokers use to get designations and build a knowledge base.

“When I got licensed in property and casualty, and getting my P&C license, I didn’t learn one thing about environmental insurance or pollution exclusions on every GL policy. I learned about auto insurance, property, and personal lines,” said Dybdahl Oroian. “I feel honored to take over as president of SEIP to expand the utilization of environmental insurance by the mainstream market of insurance agents that have nowhere else to learn it.”

SEIP’s president has been an environmental insurance broker for a dozen years now and has witnessed firsthand the developments in the space. Right now, pipeline companies are causing a headache for stakeholders, and they’ll be the focus of a session at SEIP’s annual conference in June.

“Pipelines are a really big risk that’s gaining more public attention for their extreme losses, especially in the United States, where taxpayers no longer want to hold this liability for clean-up and are pushing back on the actual pipeline companies themselves for proof of insurance,” said Dybdahl Oroian. “What pipelines are doing is they’re showing proof of financial responsibility for clean-up costs by being independently wealthy. They won’t buy environmental insurance because they have enough money in reserves to finance a clean-up today, which is fine until, for example, all of a sudden their max output is decreasing and their risk is staying the same.”

Taxpayers often end up being on the hook for clean-ups, especially if toxic materials end up in waterways or affect the communities’ natural resources in other ways.

“If [pipelines] are coming through, they’re a very permanent thing, and their losses can create irreversible degradation to the environmental resources they're going through,” explained Dybdahl Oroian.

Now, some counties are requiring pipelines to carry environmental insurance, a step forward since oftentimes, these energy powerhouses carry the same general liability policies as flower shops. SEIP hopes to expand knowledge about this issue and many others related to this type of insurance at its conference.

“There is a huge learning curve for P&C agents and brokers because if you don’t know what exclusions to look for, then how can you even start to make sure that you’re offering the right insurance for your client,” Dybdahl Oroian told Insurance Business. “It’s an integral part of our economy, that environmental insurance is used, and that’s really being skipped over in the insurance industry.”

 

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