Financial and Insurance Industries Perspective Opportunities for Enhanced Environmental Insurance Co

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Financial and Insurance Industries
PerspectiveOpportunities for Enhanced
Environmental Insurance Coverage through the
Implementation of Advanced Environmental
Management SystemsSteve PiatkowskiVice
President, Engineering ACE Environmental
RiskPerformance Track Participants Association
Baltimore Maryland April 21, 2004
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Session Overview

• Insurance Primer
• Coverages Available in the Market
• Identifying Environmental Exposures
• Developing Rates, Terms, Conditions

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Environmental Risk an Insurance Perspective
Receptors
Contaminants
RISK
Exposure Pathways
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Exposure Pathways

• Soil
• Groundwater
• Surface Water
• Air

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Insurance Coverage Elements

• On- and Off-site Remediation Costs
• Third Party Bodily Injury
• Third Party Property Damage
• Legal Defense Expense

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On- and Off-site Remediation Costs

• Expenses Incurred
• Investigation, removal, disposal and treatment of
  pollution conditions
• Coverage Can Be Triggered by
• Discovery of Contamination
• Third Party Claims (including Government Demands)

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Third Party Bodily Injury

• Physical Injury, Illness, Disease
• Future Medical Expenses, Monitoring
• Emotional Distress

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Third Party Property Damage

• Physical Damage to Tangible Property
• Loss of Use
• Diminished Value
• Natural Resource Damage

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Legal Defense Expense

• Defense Costs
• Investigation, adjustment or defense
• Probably Most Costly Insurance Exposure

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Identifying Environmental Exposures the Role of
the Risk Assessment Survey

• Corporate Management Philosophy
• Site History
• Water/Wastewater Management
• Air Emissions
• Materials Handling Storage (includes ASTs/USTs)

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Identifying Environmental Exposures the Role of
the Risk Assessment Survey (continued)

• Waste Management
• Compliance History
• Pre-existing Soil and/or Groundwater
  Contamination
• Emergency Response
• Employee Training

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Developing Rates and Terms

• Type of Industry
• Financial Analysis
• Past Operations
• Pre-Existing Contamination
• Type of Contamination
• Losses (Spills, Releases)
• Neighboring Sites (Receptors)
• Potential Environmental Pathways

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So You Want to be an Underwriter?

• Application
• Company Financials
• Phase I Report identifying multiple AOCs
• Thats all you get to bet the house!

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