Benchmarking Trends: US Environmental Insurance Rates Remain Competitive

Despite broad demand for environmental insurance, pricing remained generally soft as only some markets continued to firm.

The construction industry saw some of the lowest pollution legal liability (PLL) limits purchased for projects in the first half of 2013 due, in part, to a number of larger, complex projects being pushed back to later start dates.

The demand for environmental insurance across all industries in the US increased in the first half of 2013. Generally, insureds continued to seek environmental insurance for mergers, acquisitions, divestitures, brownfield redevelopment, and a variety of other business areas. Rate increases were seen from some insurers, although not across the entire market. Rates for industries that routinely work with hazardous materials or need to clean up contaminated sites, such as manufacturing and chemical, remained competitive.

According to the report:

• The demand for environmental insurance across all industries in the US increased in the first half of 2013.
• The construction industry saw some of the lowest pollution legal liability (PLL) limits purchased for projects during the first half of 2013 due, in part, to a number of larger, complex projects being pushed back to later start dates.
• Insureds with exceptionally good loss histories and lower hazard exposures generally had higher limits available.
• Industries that are considered “high risk” in areas such as potential exposure to pollution lawsuits are generally seeing higher limits in 2013 than industries that are less likely to need this coverage.