Pollution coverage placements require planning: Expert

CHICAGO — Risk managers should consider their organization’s corporate culture and stance on environmental risks as they deal with various pollution exposures and distinct regulatory environments, an environmental insurance expert said.

Insurance coverage is available for various exposures, but buyers should ensure they provide underwriters with as much data as possible to optimize coverage, said Jessica Biggs, Toledo, Ohio-based environmental practice leader at Hylant Group Inc., during a session at Riskworld, the Risk & Insurance Management Society Inc.’s annual conference, on Monday.

They should also have plans in place to respond to an incident, she said.

Pollution risks such as oil spills, air pollution, and the dissemination of microplastics can cross borders and be subject to various environmental clean-up laws or may not yet be governed by any regulations, she said.

“You really need to start very, very basic and just determine what is your hazard, and not all occupancies are going to have the same environmental hazards,” Ms. Biggs said.

For example, a manufacturer may be concerned about air emissions, whereas a resort or university may be more concerned about indoor air quality, she said.

Coverage for pollution falls into two main silos, she said: transactional risk insurance, which covers historic pollution, and operational risk insurance, which covers new conditions or an event.

Once a company determines the type of coverage it needs, it should consider the laws it is subject to in the jurisdictions in which it operates, its appetite for retaining risk, and which jurisdictions it wants coverage for, Ms. Biggs said.

Insurers will be looking for information on countries a policyholder operates in, a statement of values, loss runs —  including for general liability and property policies —  and anything else that might affect an environmental exposure, she said.

“This is a space where data and information is king,” Ms. Biggs said.

In addition to insurance coverage, companies should have incident response plans in place, including a media relations plan, she said.