Superstorm Sandy's destruction drives home comprehensive environmental coverage needs
Many are predicting that Sandy's devastation has caused between $30 billion and $50 billion in economic losses, while data aggregatorProperty Claims Service(PCS) has put insuredlossesfrom Sandy at $11 billion. Disaster modeling firms including RMS, AIR Worldwide and Eqecat range from $15 billion to $25 billion in insured losses.
Whatever Sandy's final loss numbers turn out to be, the massive losses will pave the way for a flurry of activity for environmental contractors and consultants who will be hired to manage the process of rebuilding and remediating everything from underground storage tanks to sewage lines.
In fact, according to Alex Pittignano, Profit Center Manager-Environmental for Starr Indemnity & Liability Company, Sandy's destruction has created a layer of environmental damage that has slipped under the radar in the storm's aftermath.
"When you look at Sandy, the focus has been on water damage to property, but the storm also caused a lot of environmental damage," Pittignano explained. "When you have a catastrophe like this, with its great big surge, a lot of the infrastructure damaged involves underground storage tanks that break connections with piping. Those small spills can result in significant damage."
Pittignano added that, apart from fire and water damage, cleanup services such as mold and asbestos removal, along with underground tank activity, will see a spike in activity.
"Sandy's aftermath underlines the pivotal value of appropriate coverage and sound underwriting when it comes to environmental risks," Pittignano said.
To help contractors and consultants who will be taking on that type of environmental remediation work, Starr offers its Eco Starr Suite, which contains a broad range of flexible and comprehensive liability products. Starr Environmental clients in some way touch the environment, whether it is post-Sandy remedial work, waste materials or within the business of recycling. Insureds range from environmental consultants who do studies of wildlife and/or groundwater, bodies of water, etc. Or, they could do work associated with cleanup, treat wastewater, purify water for drinking, or manage and maintain sewer lines.
The Eco Starr Suite offering includes Workers' Compensation, General Liability, Contractor Pollution Liability, Professional Liability, Site Pollution Liability, Transportation Pollution Liability, and Follow Form Excess.
"Our package policies allow insureds to select the coverages that most effectively address their particular risk," Pittignano explains. "We look at each risk on its own merits. Much depends on the expertise, professionalism and history of the company seeking insurance."
Richard Bessinger, Starr Indemnity's Senior Vice President, says that, while Starr has had the opportunity to write a substantial amount of liability business, any accounts it writes must have the right risk management controls in place.
Bessinger added that loss control is critical and mandatory for most risks, as Starr uses loss control as much as an underwriting tool as a risk mitigation tool -- delivering value for clients in the process.
"We gain some security on our end, but we also help insureds manage the risks they keep themselves, including reputational risks," he said.
For brokers, Starr Environmental target customers include, but are not limited to:
-- Municipal solid waste landfills
-- Municipal waste incinerators
-- Construction debris landfills
-- Recycling facilities
-- Composting facilities
-- Municipal solid waste landfills
-- Manufacturing facilities
-- Chemical manufacturing
-- Commercial properties
-- Real estate portfolios
-- Food processors
-- Agricultural properties
-- Bulk storage facilities
-- Schools and universities
Coverage-wise, the Eco Starr Suite general highlights include:
-- $1 million primary limit
-- Up to $25 million limit available
-- Maximum combined primary and excess limits of $26 million/$27million/$27 million available
-- Multi-year practice policies available for companies with revenue less than $1.5 million and payroll less than $500,000.
-- Coverage available for U.S. companies with operations and facilities anywhere in the world
-- Project policies available with policy term up to five years
-- Pollution legal liability policies available with terms up to 10 years
-- Workers' compensation available in all 50 states (Workers' compensation will be written as a supported line)
-- Commercial automobile, including liability & physical damage coverage (Auto will be written as a supported line to workers' compensation and/or general liability)
-- Available on both admitted and surplus lines basis, depending on jurisdiction
"We offer a one-stop opportunity, with all the primary lines including pollution," Bessinger said. "It is a very broad casualty product suite, in addition to workers' compensation and auto. We believe it is a solution that creates a consistent tower of insurance for any business that has environmental touch points."
Moving to claims, Starr Environmental claims are handled by a well-respected third party administrator, Louisiana-based F.A. Richard & Associates, which has been in the business of handling environmental claims since 1978.
Pittignano, an environmental engineer himself, explained that Starr carries a true national portfolio, one not heavily weighted in any single geographical area.
"Our environmental team is embedded throughout the country, so we can deliver the same high level of customer services in any region," he said. "These are our underwriters and environmental is what they do. They understand the exposures and solution. Everyone on our team comes with similar skill sets to create solutions for the market. It's important for brokers to know that they have an underwriter that understands their client's exposure."
Looking ahead, Starr Environmental seeks to partner with brokers and their clients for the gamut of environmental risks, and especially believes that some of the damage caused by Sandy will create opportunities.
"With the activity in this space in New York and New Jersey, we expect a real spike in opportunities to insure the firms that will be doing a lot this work," Pittignano said. "Much of it falls into the sweet spot of what we offer. What we do every day makes us a very good partner for the firms who will be doing this type of work."
This article provides only a partial description of certain terms and conditions offered. It is intended solely for general informational purposes and does not provide any guidance regarding coverages that may or may not be available under a policy as it respects to any claims. Please refer to actual policy form for all applicable terms and conditions. All coverages may not be available in all jurisdictions. For more information about Starr Environmental, visit starrcompanies.com or contact Alex Pittignano at email@example.com or at 646-227-6559.
399 Park Avenue, New York, NY 10022
STARR COMPANIES (or STARR) and the STARR Logo are trademarks worldwide for the services offered by the operating insurance and travel assistance companies and subsidiaries of Starr International Company, Inc.
(The above piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for Insights was written and edited by Risk & Insurance®
on behalf of our marketing partner. Additional Insights can be found on our Web site at www.riskandinsurance.com.)
December 12, 2012
Copyright 2012© LRP Publications