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Director
Aon, Chicago

Broker "Cleans-Up" a Sale

There is nothing like a slew of newly uncovered environmental liabilities to put a damper on the sale of an 85-year old family-owned specialty chemicals distribution company.

And those liabilities provided veteran Aashish Chauhan, a director with Aon Risk Solutions in Chicago, the chance to prove his mettle so the Robins family could finally retire from the business.

While G.S. Robins had an environmental policy in place that would have covered all the newly documented liabilities, it was set to expire in 2013 at which time exclusions would most likely have been put in place. Meanwhile, the buyer was asking for a 10-year indemnification period.

Chauhan opened up the extensive data room to policy carrier Chartis, and waited for their terms to provide coverage for the transaction. The transaction, worth about $50 million, utilized run-off directors' and officers', reps and warranties, and environmental coverage.

"Without the availability of the right insurance the deal to sell my company would not have happened," said G.S. Robins principal Steve Robins.

For the Marine Spill Response Corp., the 2010 Gulf of Mexico oil spill created numerous headaches as renewal period came around for 2011 coverage.

"A.C. did a superb job in working with our carriers, keeping them informed and helping them understand that their perceptions of risk exposure were overstated, and creatively coming up with alternative methods of calculating the 2011 premium that saved us significant premium dollars," said Mike Sample, vice president and general counsel for Marine Spill Response Corp.

Vice President
Marsh, New York

Brokering a Tricky Deal

An Australian mineral resources company that was new to the industry, WPG Resources, in early 2011 turned to Adam Hill -- vice president, N.Y. metro hub leader environmental at Marsh Inc. -- for advice on a long-term iron ore exploration project and its associated infrastructure development for exporting product.

The land was previously leased by a global energy and petrochemicals company, resulting in known on-site pollution conditions. At the time of the transaction, the land was owned by the state government of South Australia. Under the proposed purchase agreement and development clauses, there were requirements to remediate the known pollution conditions and requirements governing the responsibility for any off-site migration of these conditions.

As the client was unfamiliar with environmental risk transfer, Hill worked closely with company risk managers to educate them on the potential environmental exposures and available environmental insurance products. After six months of coaching, the client, through negotiations with the South Australia state government, developed a cost-effective structure that satisfied the client's needs and the complex environmental clauses in the purchase agreement.

"Adam was very clear with explanations about our insurance requirements and was always available to talk, either on the phone or in person, as we wanted in a prompt manner," said Larissa Brown, company secretary for WPG Resources.

Senior Vice President
Marsh, Los Angeles

Fickle Carriers Test Mettle

Sometimes a new insurance carrier coming in with favorable pricing and terms for a difficult renewal can be a case of being careful what you wish for.

Marsh broker and Senior Vice President Charity O'Sullivan found herself in just such a situation last fall for her client, a multinational manufacturing company, when that new carrier's management about-face resulted in much more restrictive coverage. The client's claims under the expiring program, along with its lack of environmental reports, complicated her task of coming up with a replacement.

O'Sullivan quickly found a back-up market, which resulted in a 35 percent premium reduction and an overall improvement in terms and conditions. The client's risk manager noted that one of the coverage extensions she negotiated included a favorable claims reporting provision, "which provided us with more autonomy in handling any future remediation issues."

In addition, O'Sullivan developed benchmarking information on the client's peers, which allowed her to alter the program and provide more risk transfer security, "in keeping with our overall philosophy."

Overall, the risk manager said that O'Sullivan's keen grasp of the varying environmental requirements of the dozens of countries where it has facilities has made her a valuable member of its risk management team. As both a buyer and seller of properties with potentially grave environmental liabilities, O'Sullivan always manages to come up with solutions that give the company peace of mind.

"She is a person of great integrity and insight," the risk manager said.

Managing Director
Aon, Jericho, N.Y.

Landfill Gas to Fuel Vehicles

When you can play any role in furthering a technology that can help reduce this country's dependence on foreign oil, it just makes going to the office every day all the more enjoyable.

Howard Tollin's work with the Cornerstone Environmental Group will aid in its quest to take landfill gas and convert it into fuel for vehicles. A large contract for BioCNG was recently executed and Tollin looks forward to many more as alternative energy sources become a reality and not just a politician's slogan.

Tollin's efforts for a New York metropolitan area law firm helped facilitate a very difficult litigation settlement.

"The carriers were reluctant to accept the risks, and Howard guided us to two carriers for the two sites at issue and was eventually successful in getting quotes for policies that would cover all of our risks," said a partner in the firm.

Tollin also helped the firm's client who wanted to insure third-party claims and risks of unknown contamination for a difficult cleanup located near a Superfund site.

"By approaching new markets, Howard was able to offer our clients options to cover risks in difficult-to-insure situations," she said.

As a director for New Partners for Community Revitalization, Tollin's expertise in environmental insurance helps in furthering the group's goal to turn brownfields throughout the state into thriving tax-generating properties. New Partners Executive Director Jody Kass said Tollin's environmental insurance knowledge has been instrumental in the group's achievements.

Senior Vice President
Willis, Chicago

When the Pollution Needs a Solution

A major manufacturing company's nascent acquisition of a European business with chromium contamination issues might not have gone through had it not turned to Max West for what the broker likes to term "the solution to the pollution."

With a relatively short two-month timeline, West delivered a solution with premium costs that were below expectations, said the company's CFO.

"In order to bind the policy on time, Max had to work through a number of complex issues such as cross-border coverage and seller indemnifications," the CFO said.

A private equity firm seeking to acquire a medical supply company in the Netherlands confronted serious environmental issues that almost derailed the deal since notification was required to nearly 2,500 residents.

While a competing brokerage firm deemed the risk uninsurable, West's research unearthed a number of salient facts about both the pollutant and Netherlands culture to make a case for coverage that in the end resulted in $50 million limits. The coverage removed a huge unknown off the table so the deal could go through.

And finally, when a neighborhood organization in a major American city wanted to build a school, West came up with what he termed a "poor man's cost cap" customized policy that allayed investors and governmental fears about the known and unknown contaminants on the site.

A shout-out from the governor at the dedication ceremony was the icing on the cake in the satisfaction of making a difference in the lives of residents in a struggling neighborhood.

Managing Director, Environmental
Aon Risk Solutions
Chicago, IL

Managing Director
Marsh
Philadelphia, PA

Senior Vice President
Willis
Radnor, PA