Avoid Insurance Broker Professional Liability Losses from Environmental Risk
Environmental risks permeate virtually all public and private organisations. Because of universal exclusions in standard property and liability insurance policies for losses arising from contamination, loss events are routinely ignored in insurance program designs. There are significant, and usually needless insurance coverage gaps for environmental losses in the insurance programs of most insurance buyers. Informing customers on the effects of pollution exclusions is a key to avoiding potential professional errors and omissions (E&O) losses for insurance brokers.
The only reliable insurance for contamination-based losses is an environmental insurance policy.
Uninsured losses arising from various contaminants combined with the very poor market penetration of affordable environmental insurance products combine to create potential E&O claims for insurance brokers.
Virtually all professional liability loss exposure for unintentionally uninsured contamination and pollution losses can be eliminated by following a simple four-step loss-control process. Unlike other environmental insurance broker loss-control protocols, which add time and expense to implement, the natural outcome of this loss-control protocol is for new environmental liability insurance business to be produced.
Taking a proactive approach to enable the customer to decide to be uninsured for environmental liability is the key to professional liability loss avoidance for insurance brokers.
Environmental E&O Loss Prevention
The following are four main steps in this environmental E&O loss prevention approach.
- Inform the client about their environmental liability loss exposures.
- Point out the various pollution or contamination exclusions in the standard property and liability policies in their current environmental insurance program and discuss the effect of the exclusions on the insurance coverage.
- Offer and recommend the purchase of environmental insurance coverage to fill the highlighted coverage gaps.
- Confirm that the proposed environmental insurance policy provides the needed coverage.
Following these steps not only protects you as an environmental liability insurance broker and practitioner but also helps ensure that your clients are adequately covered for the environmental loss exposures they face.