Natural Disaster Seasons Are a Great Time to Talk Pollution Insurance
2016 NATURAL CATASTROPHES: Insured losses due to natural disasters in the United States in 2016 totaled $23.8 billion, according to Munich Re, more than the $16.1 billion total for 2015. Severe thunderstorms losses, at $14 billion, accounted for about 60 percent of the 2016 insured losses. Floods and flash floods accounted for $4.3 billion in insured losses in 2016, and tropical cyclones accounted for $3.5 billion in insured losses. Winter storms and cold waves caused $1 billion in insured losses in 2016. Wildfires, heat waves and drought produced $1 billion in insured losses in 2016. (source: Insurance Information Institute)
As ERMI has coached in the past, Natural Disaster Seasons (NDS, i.e. Flooding, Tornados, Forest Fires, Hurricanes…) is a great time to talk pollution. Did you know most pollution policies do not exclude Acts of God.
During NDS, national and local media are lighting up the airways / internet highway with all the pollution problems caused by a natural disasters. You hear about storage tanks releasing their contents as debris crashes into them during flood season. Pollutants spread out over miles from tornados or hurricanes. Forest Fires engulfing communities and causing explosions that release pollutants in the air and the list goes on.
Note: Pollution losses tend to be a severity versus frequency issue.
The Prospects you want to strategize with on the value pollution insurance adds to their business model during NDS are those that feel they do not have a pollution exposure. For this example, let’s use real estate owners. For sake of avoiding an argument, agree with the real estate owners they do not have a pollution exposure, but then ask, what if a natural disaster deposits pollutants on your real estate? As we move into spring the thoughts of melting snow carrying contaminants to nearby waterways to be deposited downstream during flood season to unsuspecting real estate owners in one simple example.
Note: Under federal law, the real estate owner is ultimately responsible for the environmental condition of their property.
It may not be until years later when the real estate owner goes to sell their property and an environmental site assessment unveils an environmental problem from pollutants deposited during NDS. Whose responsible?
Since every business is impacted by environmental exposures, it’s now part of “Best Practices” for businesses to have a financial assurance strategy in place to address their exposure to environmental liabilities caused by Natural Disasters.
NDS and pollution insurance go together like April showers that bring May flowers.
As your team member for all things environmental, let ERMI know how we can assist you to drive your sales during NDS.