Virtually every business in existence faces either direct or indirect environmental exposures. Through development and execution of an environmental Management Strategy (eMS), most businesses realize they do not possess the financial strength to self insure their environmental exposures. One environmental risk transfer strategy is to purchase an environmental liability insurance policy. A quality environmental insurance submission allows you to successfully negotiate the broadest coverage at a competitive price.

Unlike standard P&C underwriters, environmental insurance underwriters generally come from technical backgrounds, i.e. environmental engineer, hydrologist, geologist, industrial hygienist…. A technical person likes to review environmental due diligence, contracts and graphs while using their knowledge to build an environmental risk transfer pricing model, i.e. insurance premium.

Professionals seeking environmental insurance are often fooled believing any bit of information is better than no information. The quality of the submission determines the level of interest an environmental insurance carrier is going to give a submission.

STANDARD ENVIRONMENTAL SUBMISSION CHECK LIST

In addition to the appropriate application your submission should include:

WEB SITE ADDRESS: An Insured’s web site is their portal to the world. Many times a web site can offer as much or more information than a personal, onsite inspection.

THREE YEARS FINANCIAL STATEMENTS: This information is critical for a few reasons. First, the deductibles/SIR’s we are dealing with are larger than standard property and casualty insurance policies. If the insured can’t afford to pay the deductible/SIR then the insurance company does not have to pay the claim. Second, in the underwriting process, different rates are used for different exposures, i.e. subcontracted work, payrolls for certain classes of employees, etc.. The financial statement lets the underwriter review the exposures and determine which factors will offer the most favorable premium to your client. Thirdly, each type of work performed by the insured in most cases has to be listed on the application in order for there to be coverage. A Financial statement shows the various revenue streams of the insured thus reducing the chance of missing an exposure.

LOSS RUNS (3 TO 5 YEARS): Generally, environmental insurance carriers will not release an indication or bind coverage without currently valued loss runs in hand.

RESUMES OF KEY PERSONNEL: Due to a lack of historical data in underwriting environmental risks, insurance companies pay very close attention to who, is running the company and their qualifications. If you have experienced management with a favorable loss history, it works to the Insured’s benefit. If the Insured is a new entity it becomes even more important to show the underwriters the qualifications the management team possesses. For asbestos, lead or mold coverage’s insurance carriers require proof of appropriate training and/or a copy of the asbestos/lead/mold, awareness/management program.

COPIES OF CONTRACTS/AGREEMENTS USED WITH CLIENTS AND SUBCONTRACTORS: Often times, environmental insurance is purchased to meet a requirement in a contractual relationship. By supplying the contracts being used by the Insured, you can make sure the insurance put in place will follow the contractual requirements. We suggest you make the contract part of the actual policy.

BROCHURES / STATEMENT OF QUALIFICATIONS: To often insured’s try to portray themselves as a one stop shop for any issue, when in fact they are not. Implied expertise has been the subject of many lawsuits and will continue to be. By reviewing the brochures and qualifications package you can assist in reducing the Insured’s loss exposure. This information also helps in filling out an insurance application.

ADDITIONAL INFORMATION NEEDED FOR ENVIRONMENTAL IMPAIRMENT LIABILITY COVERAGE

ANALYTICAL DATA: (environmental due diligence (Phase I reports, Phase II, BEA’s) Air Emissions, Water Discharge, Monitoring Results, Waste Streams Generated, Etc.): This information is critical for anyone that is looking for site specific coverage such as Environmental Impairment Liability coverage, Property Transfer coverage, Cost Cap coverage and so on.

SITE DIAGRAM/PHOTOS: As the old saying goes, a picture is worth a thousand words.

LIST OF MATERIALS: The type and amount of raw materials stored, storage method, use, waste stream, is critical information for the underwriter.

COPY OF THE INSURED’s SPILL PLAN: Any company dealing with regulated substances must have a spill plan. A quality spill plan reflects favorably upon the Insured. Instead of the entire plan you can send the table of contents.

COPY OF MAINTENANCE PROGRAM: Just like a spill plan, a quality maintenance plan will benefit the Insured in maximizing product pricing and coverage. Instead of the entire plan you can send the table of contents.

ADDITIONAL INFORMATION NEEDED FOR CONTRACTORS CONSULTANTS

FOR ASBESTOS, LEAD OR MOLD COVERAGE: Training certificates showing the insured has the proper training to perform the work. If it’s a contractor that does not perform remediation services then a copy of the mold awareness/assessments procedures will need to be supplied.

PAST PROJECT DESCRIPTIONS: This allows the underwriters to see the type of work the Insured has performed and where their area of expertise lies. You would be surprised how a project description uncovers different types of work the client has not even informed you they do. Typically, if you do not specifically list the various types of work the Insured performs, the carrier for work not listed will not afford coverage.

WRITTEN SAFETY PROGRAMS: This is an essential part of any company operating today. With all of the government regulations, from OSHA to the EPA, it’s in an Insured’s best interest to have a solid safety program that each employee is familiar with. Make sure each employee signs the safety manual, as evidence that they are familiar and knowledgeable with the Insured’s safety program. Instead of the entire plan you can send the table of contents.

TRAINING MANUAL: Just like the safety program, a training manual is critical to any business operating today. Not only does the training manual assist in eliminating potential environmental claims it also protects the Insured from employer liability suits under their workers compensation coverage. Again, make sure each employee signs the training manual, as evidence that they are familiar and knowledgeable about the Insured’s training program. Instead of the entire plan you can send the table of contents. Instead of the entire plan you can send the table of contents.

ADDITIONAL INFORMATION NEEDED FOR UNDERGROUND AND/OR ABOVE GROUND STORAGE TANKS

It tanks are older than 10 years send most recent tank tightness test and/or automatic test strips and if there has been or is any remediation will need No Further Action letter or most recent environmental reports.

ADDITIONAL INFORMATION NEEDED FOR AUTO POLLUTION LIABILITY COVERAGE

MVR’s FOR DRIVERS:

COPY OF THE DRIVER TRAINING MANUAL: Automobile claims are one of the biggest exposure areas any Insured faces. The quality of their training program will have a direct impact upon their losses. Any Insured who accepts raw materials or generates a waste stream that is transported over the road, should be very concerned about who they are using and the quality of their training program. Instead of the entire plan you can send the table of contents.

MAINTENANCE PROGRAM: Any good transportation company will have complete files on each and every vehicle in their fleet. In the file there should be information pertaining to the maintenance performed on the vehicle, when it gets oil changes, fluid checks, tires, etc.. If this information is not well documented it’s an early sign of an accident waiting to happen. Instead of the entire plan you can send the table of contents.

SUB-HAULER AGREEMENTS: If the transportation company is using a third party to haul for them, the insurance carrier wants to know who is responsible for what, should an environmental loss occur.

OWNER – OPERATOR AGREEMENTS: For the same reason outline under sub-hauler agreement.

FLEET AND DRIVER SCHEDULE AND APPROPRITE ACORD FORM: This is the same as for standard commercial auto coverage.

IN TRANSIT SPILL PLAN: Transporters hauling regulated materials are required to have an in transit spill plan. A copy of this plan should be in each vehicle along with the main and dispatch office(s). Make sure that each driver is familiar with the plan. Instead of the entire plan you can send the table of contents.

**All of the submission material we have outlined should be easily accessible to any Insured. If for any reason an insured does not have the necessary material, it should be a sing of someone who can use your help. Assisting the insured to put this information together will allow you to offer more value added service, separating yourself away from the supposed competition.

Quality Underwriting, Requires Quality Information, The Choice Is Yours.

Note: Electronic submissions are preferred. If you need an application or have questions on environmental insurance not reviewed in this competitive environmental intelligence call/email Chris Bunbury, eS Phone: 231-256-2122 Email: jcbunbury@aol.com.