This article was produced in partnership with The Hartford.
Desmond Devoy, of Insurance Business America, sat down with Robert Wade, environmental underwriting manager, and Matthew Taylor, senior managing director, at The Hartford, about the need for seamless environmental insurance for companies operating around the world.
The phrase is that the grass isn’t always greener on the other side – and certainly that’s the case with environmental insurance. Depending on which side of a state or country border you sit, it may be priced or enforced differently.
The Hartford has been there, with clients all over the world, and done that - namely, insure those clients, helping to provide the appropriate coverage locally and abroad.
“When you’re putting together a worldwide environmental insurance program, it’s not just a financial backstop,” said Matthew Taylor (pictured left), senior managing director with The Hartford, based in the US. “Carriers like us can provide coverage locally, where the rubber hits the road.”
When it comes to a claim, there are a lot of resources that The Hartford can employ – whether that’s providing legal resources, handling emergency responses, and more. Clients may buy a policy to provide financial security as the first step, but, for Taylor, “it’s what we’re able to provide from a claims handling perspective, all the way through the process” that really counts.
Robert Wade (pictured right), an environmental underwriting manager based in the UK, agreed that The Hartford’s worldwide resources help provide a seamless experience.
“Matt and I have been working together for quite a few years to really support the larger companies with their exposures worldwide,” Wade said. The Hartford is now able to utilize the Lloyd’s of London platform which “enables us to write policies all around the world. We have that global reach now. We can move and go where our clients are going.”
As global as The Hartford’s reach is, one thing is clear – there is no “one-size-fits-all” policy, especially when it comes to environmental cover.
“It would be wonderful to have one global policy,” said Taylor. “Ultimately, that’s something that’s not available due to regulatory issues. There are certain places that require locally admitted coverages, and that’s something we are able to address.”
He works with Wade to devise the best coverage options based on the individual geographical region in question.
“We are required to break the insurance program up depending on the insurance operations and where the insureds’ locations are, and we utilize the Lloyd’s platform and our US operations to put all that together,” said Taylor. Wade added that “you’d ideally want to have a local policy in certain territories because of the different jurisdiction, how the legal framework works, which is very different,” he said.
There are numerous examples of differences in how countries enforce environmental protection laws – and even how jurisdictions within countries can differ. For example:
“It’s about making sure you’re covering all the breadth of risks that’s unique to those individual countries or jurisdictions, which is very difficult to do under one big master policy, even if the regulations did allow you to do so,” said Wade.
Taking inventory is another important step for anyone looking to secure sufficient environmental insurance coverage.
“The starting point is you always look at the bricks and mortar, where are they physically located?” said Taylor. That applies to domestic coverage, but when it comes to operations abroad, there are additional factors to consider.
“You have to think about their supply chain and their business activities,” said Taylor. “And what are their exposures? Are they transporting chemicals around the world? Do they have chemicals, or equipment, or materials that third parties use?”
Wade points out that this is the point in the conversation where the broker comes in.
“The broker has a conversation with the insured, just to get to understand their business a bit better, to make sure we know where they’re doing things,” Wade said. This can include getting a list of their operations, as well as doing a thorough internet search of the company, and talking to the company’s environmental risk manager. “We can get a really good insight into what it is they’re doing and all their exposures by asking them directly what they are concerned about and what they hope the insurance policy can do for them.”
Geography, both natural and political, also plays a part in the conversation. Is it near a waterway, or is it a coastal property, for example? What is the geology like?
New Jersey deputizes licensed environmental professionals to develop and implement remedial action plans with limited oversight.”
Still, despite the complexities, the appetite for the cover is there. The Hartford is seeing a surge in companies making queries about environmental insurance.
“We are seeing that increase,” said Wade. “We’re seeing more and more inquiries, year on year, of people looking for environmental insurance,” being driven in part by public pressure and enforcement.
If they do purchase the insurance, The Hartford has “the ability to be able to work collaboratively across the pond and deliver a broad global program, which is really tremendous for a lot of our clients,” said Taylor. “The ability to look globally and coordinate a single program when it comes to environmental, provides tremendous benefits.”
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