Environmental risk management is critical for every organization. All businesses, regardless of size, face risks of environmental exposures and liabilities.
As people become more and more eco-minded, the importance of environmental insurance is also increasing. Not just for oil companies anymore, environmental insurance is needed by a broad spectrum of customers, from aviation and agriculture to manufacturing, education and healthcare.
Threats include hidden asbestos and lead paint, storm water runoff, hazardous waste disposal, indoor air quality, exposures to mold or bacteria and much more. Unfortunately, standard commercial general liability policies largely exclude pollution and many other scenarios.
Management consulting firm AT Kearney studied companies with strong commitment to environmental risk management, comparing their performance with the industry averages. In 16 of the 18 industries studied, those companies committed to sustainability outperformed industry averages by 15%.
Our goal is to help clients develop and execute environmental risk strategies.
Environmental risk strategy helps clients manage and transfer their environmental risks. This provides more control and more information so businesses can make better decisions as to the best way to handle these risks
The Key Question that business owners must be able to proactively answer: If there’s an environmental problem, what’s our strategy?
The Proudfit Environmental Risk Strategy 4 step process helps clients answer this question. We work with clients to establish a baseline that explores the direct and indirect environmental exposures facing their business. (define the 4 steps?)
Environmental Liability Insurance is only part of an environmental strategy. At the very minimum it shows you have a financial plan to address an adverse environmental exposure.
The three main benefits environmental liability insurance offers:
1. Defense Costs: Environmental liabilities are relatively new and very litigious. Even if you do nothing wrong you can still get named in a suit and have to expense defense costs i.e. legal fees, environmental investigations. (A statistic from a couple of years ago showed for asbestos payments 60% went for legal fees and over 100,000 jobs were lost.)
2. Claim Management: All policies come with specialists to assist you in handling a claim. Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
3. Third Party Liability: The majority of the time the cost to clean up the environmental problem/s is far less than the associated claims that come in from third parties for bodily injury, property damage and business interruption. You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.
98% of United States businesses are small businesses that cant afford to self insure environmental claims.
