State of the Insurance Market Report

Environmental carriers continue to offer coverage for PFAS. However, clients will need to be prepared to provide the carriers with proof that an environmental assessment has been performed, as coverage may be limited until underwriters fully understand the risks.

If PFAS has been identified in the report, it may be difficult to obtain full or partial coverage. Clients should consider other methods of protection to cover the risk if they are brought into a regulatory action or liability suit. Other alternatives to consider are occurrence general liability policies put in place pre-1986, before full pollution exclusions were added to insurance policies.

Another option may be self-funding through a single-purpose captive. Clients need to be prepared to address this exposure. The issue is not going away anytime soon and it’s more than likely the government will strengthen its position in the future.

Natural disasters and weather-related events such as floods continue to adversely impact the insurance market. Proactively establish disaster contingency plans if your business is vulnerable.

Meticulous environmental due diligence is vital in mergers and acquisitions. Identify potential environmental risks in target companies to prevent surprises and strengthen your risk management strategies. Consider the use of environmental insurance products to mitigate risk.