Freberg Environmental Insurance’s Stacy Brown talks with Insurance Business America about markets that have the most growth potential for environmental coverage, why the Contractors Pollution Liability and Environmental Impairment Liability markets remain virtually untapped, and why agents need to offer environmental coverage to protect themselves in this third installment of a four-part series on big opportunities in the environmental market.
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. A few 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 is the biggest misconception prospective clients have about environmental coverage?
Stacy Brown, President & Managing Partner, Freberg Environmental Insurance
Stacy Brown: I think that a lot of people believe that environmental insurance is very very expensive. I would say that coverage is measured with the amount of risk that an individual facility has. Coverage can be quite inexpensive, in particular for things like Contractors Pollution Liability, a million dollars in coverage can be very very affordable and provide very significant protection for a contractor. So I also think that as the economy has improved companies have more money to spend on different types of insurance products and I think they should very very much consider purchasing environmental insurance because of the protection that it provides from a lot of these hidden unknown exposures that they have.
Which markets do you feel have the most growth potential for environmental policies?
Stacy Brown: Environmental Impairment Liability and Contractors Pollution Liability I think are the two policies that really have the most potential. A lot of environmental companies who [live] around environment carriers provide coverage for environmental contractors and environmental consultants but the universe of those type of operations are quite limited. Perhaps 80 to 85,000 total in the United States. But if you consider the number of facilities in the United States which are in the millions, many of those facilities are handling these raw materials and hazardous materials. The premium universe are for site pollution is almost unlimited. Contractors pollution liability if you think of all the contractors in the United States, it must be also in the millions. So those two marketplaces I think are really untapped and as insurance agents become more comfortable with environmental coverage I think they're going to be presenting more and more quotes to their insured's also as a way to protect the agents own E&O because if they're not offering that coverage, they have the potential for an E&O claim, should their insured have a pollution release sometime in the future.