John Heft, SVP and Director of the Real Estate Practice at New Day Underwriting, reviews the dynamics of today’s Environmental Liability marketplace. He notes that Contractors Pollution Liability is the largest among segments of the market, with 50-60 carriers offering coverage. Mr. Heft says Contractors Pollution Liability coverage is very profitable, and coverage continues to expand as a result.
With regard to Environmental Casualty coverage, Mr. Heft says it is a General Liability policy that may include site pollution cover, or include Contractor’s Pollution and Professional Liability for environmental contractors. While capacity continues to grow in Contractors Pollution Liability and Environmental Casualty lines, Mr. Heft does mention that some carriers exit the Monoline Pollution Legal Liability (PLL) marketplace.
According to Mr. Heft, long-term (10 year) policies are used to facilitate real estate or oil/petro transactions. However, he says many carriers are backing away from long-term PLLs, because losses start creeping up in years five to ten.
Mr. Heft says the typical PLL policy is written for a 3-year period, some to a 5-year term. He believes the long-term PLL policy can be underwritten profitably, depending on the risk and the plan for the property.
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