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Senior Vice President
Marsh, San Francisco

Lending Partner Gains Comfort

Josh Frieman's San Francisco-based Prime Group commercial real estate development firm faced some challenges in growing the lending side of its business when its major bank partner balked out of fears of existing liabilities at some of its locations.

Marsh Senior Vice President Trisha Blau crafted policies for the portfolio of sites Prime owned so that the company could also cover risks from the properties it was providing funding for, although it was a non-traditional use for the policies.

After approaching several carriers with this creative proposal, Blau negotiated a program that provided protection to Prime and its lending partner with no exclusions for the existing contamination or any future potential releases from existing/future dry cleaners and retail gas stations at the locations.

"It turned out to be a very painless process and we were happy to have the coverage," said Frieman, a principal at Prime Group.

Savage Services' entry into the field of storing and loading crude oil onto rail cars posed some unique coverage challenges. As part of that process, Blau re-evaluated the client's existing program and revamped it to broaden the existing coverage to cover the risks from this new business area. "Where Trish has really excelled is handling the way the railroads like to transfer all the risk onto other parties. We have been able to get all the coverage we need for this risk we have taken on," said Scott Smith, vice president of risk management of Savage Services.

A risk manager for a large chemical company said the multiyear pollution legal liability coverage Blau negotiated serves as the underlying piece for the company's liability program.

Director
Aon, New York

'Problem' Product No Problem

A chemical manufacturer with a "problem" product poses quite a challenge to any insurance broker with the limited number of new markets willing to look at the risk, and the incumbent markets claiming it's underpriced. For Aon Risk Solutions, Director of Excess Casualty Monica Brecka, this issue was just another day at the office.

"With her many years of experience, she was able to advise us on ways to successfully restructure our program and improve many of the policy terms while simultaneously reducing our costs," said one executive with a major chemical company.

Greg Hoff, vice president of risk management for ServiceMaster, said that Brecka's expertise in 2012 helped contain potential umbrella/excess casualty rate increases and minimized increased costs due to retention changes.

"She took the time to educate us on the pros and cons of the alternative, and made it relatively easy for us to make a fully informed decision," he said.

Willy Vanhelder, director of global treasury and risk management of Buckman Laboratories International, took pride in his loss-free record, but that became a challenge when the private family-owned company's brass convinced themselves that coverage in this area was not needed. "We have lots of risks that would not be covered under the sudden and accidental component of our GL coverage, but the family had to be convinced of this," said Vanhelder. "This is where Monica truly had an impact in helping to ensure that we were protected in this area."

Managing Director
Aon, Houston

Taming Environmental's Long Tail

The policies stemming from Jeffrey Hanneman's hydraulic fracturing initiatives have closed many of the gaps companies endured in relying on traditional casualty and control of well insurance to cover the drilling practice that has gained such notoriety recently.

But other clients, such as a major convenience store chain, have also benefitted from his years of experience and his creativity.

"One improvement he was able to accomplish in our last renewal was finding a market that would not only provide a broad form PPL policy, but one that would also allow us to certificate off the PPL," said the chain's senior risk manager. "This allowed us to eliminate our separate tank policy that we were using only to certificate financial assurance to the states."

Hanneman, managing director of Aon Risk Services, also provided counseling on a number of acquisitions the company considered and found markets interested in quoting a deal when the seller's broker was not able to. In addition, he provided coverage for all the sites the company may have acquired, saving risk managers from having to report them all separately.

For Murphy Oil, Hanneman came up with unique solutions for coverage of a bulk oil storage terminal that contained historic contamination from an off-site source. The company was concerned that regulators could target them in the future if the seller disappeared and manuscripted coverage protected them from this risk. "I was really impressed with Jeff's ability to move the market downward," said Lewis Strate, Murphy's director of corporate insurance.

Managing Principal
Integro Insurance Brokers, San Francisco

Long Tails at Low Cost

A senior risk manager for one of the world's largest real estate services firms would like nothing better than to see some date-specific end to the environmental liability for the properties the company once owned.

That is where John Kim, managing principal of Integro Insurance Brokers, came to the rescue. "John was able to craft a solution that allowed us to have a tail reporting period for individual assets on our environmental program for no cost during the first year after the sale, and a very low cost beyond that," he said. "This provided the business with a risk-transfer option by removing long-term concerns around past liabilities and, most importantly, allowing us to close our books on a sold property much quicker than we would have before."

Ondrea Matthews, director of risk management and benefits for CoorsTek Inc., said that Kim created a combined master program for a number of complex international environmental exposures.

"He worked diligently with the carrier to include previously excluded conditions, increase limits on the European Freedom of Services policy without an increase in premium, and streamline the renewal timeframes and process," she said.

"He also helped make sure that all policies met the specific country guidelines for locally admitted insurers and policies. A complex renewal that provided greater limits and coverage was bound for less than the expiring premium."

Another senior risk manager for a nationwide group of fueling stations expressed satisfaction with the solutions Kim provided. "He took our proposal, and he was very aggressive in going to the market, and we achieved good results," he said.

Director
Aon, New York

Bankruptcy Complications Made Simple

Bankrupt companies often present tempting acquisition opportunities but complications can arise from the uncertainty surrounding environmental liabilities.

As a senior risk manager for the Toronto-based real estate development company, Cadillac Fairview Corporation Ltd., Loretta Miluzzi relied on Aon Risk Solutions veteran Adrian Pellen to come up with a solution to facilitate the acquisition of the bankrupt company in a way that would not put her own employer in similar straits from potential unknown environmental liabilities.

Leveraging a relationship between the buyer's parent company and their partner insurer, Pellen provided coverage for the merged entity and parent that protected them from third party claims related to clean-up costs, bodily injury and property damage including defense costs arising out of pre-existing conditions.

"Without this coverage the deal would have posed a risk that we probably would not wanted to have taken on," said Miluzzi, director of risk and insurance management with Cadillac Fairview. "The insurance gave us the comfort level to proceed."

Suzan Ness, director, operational risk management and insurance, of the Business Development Bank of Canada, said Pellen has always been there for her when questions arise.

Oxford Properties Group Inc. director of risk management Ed Martingano said Pellen's assistance in getting a 10-year policy on a site was the clincher to close the deal. "It was a competitive process and our leg up on the environmental aspect helped us greatly," he said.

Senior Vice President
Aon, Chicago
Degreasing Site Proves Messy

Transforming an old industrial degreasing site into a recreational area to satisfy the concerns of the Northbrook Park District was no "day in the park" for Max West, formerly senior vice president at Willis and now with Aon Risk Solutions. Chicago-area attorney Rachel Robert, acting for the district, knew she could turn to West to make the deal happen.

West customized a policy that addressed the known chlorinated solvents in the ground that are particularly nettlesome as they are heavier than water and sink rather than float. They can go further afield and off-site, thus creating greater risk. "It was not necessarily a straight-forward deal and Max was very creative in fashioning a policy that was acceptable to both the buyer and seller," she said.

DeNovo Properties specializes in purchasing contaminated sites that are then put back on the market after full remediation. As part of this process, the group indemnifies the sellers for any liabilities that may arise after the sale. Owner Jonathan Markoff has worked with West for 10 years in obtaining excess indemnity policies that puts sellers' minds at ease should DeNovo come up against catastrophic challenges and cannot complete the job.

Obtaining environmental insurance for a company dating back to the 19th century proved challenging for one D.C.-area attorney, who turned to West. "Working with the carrier," the attorney said, "Max showed how the company had made every best effort to disclose all the sites and liabilities they are aware of, and customized the language to cover the scheduled sites and also any unknown sites the company operated over time."

Managing Director
Wortham Insurance and Risk Management
Houston

Senior Vice President
Arthur J. Gallagher & Co.
Chicago