Environmental Risk Resources Association

Expanding the use of environmental insurance as a risk management tool through education, technology, resources, innovation and networking.

Winter 2004

Featured in this Issue:

2003 Environmental Insurance Market A Year In Review
And 2004 Environmental Insurance Market Forecast

The material for this article was compiled from interviews with ERRA members.
The environmental practices of the major retail brokers had the poorest growth in history as they reach market saturation on their sales platforms and some became distracted with personnel changes. In contrast middle market independent agents and specialty wholesalers had a record growth year.

The Impact of Universal Mold Exclusions on Lenders and Practical Risk Management Solutions
By: David J Dybdahl, CPCU, ARM, Senior Consultant, American Risk Management Resources Network, LLC
The introduction of mold/fungus/microbial exclusions in virtually all personal lines and commercial lines insurance policies over the past two years has created newly uninsured loss exposures for lenders on an unprecedented scale.

First-Party Insurance Coverage For Mold
By: Edward Eshoo, Jr., Childress & Zdeb, Ltd.
Over the past four years, there has been an explosion of first-party property insurance claims regarding coverage for mold damage. How have insurers been responding to these claims? Although some insurers have challenged whether mold damage is covered, most insurers have been covering mold damage ensuing from a covered peril. However, the surge in mold-related claims within the past four years, as well as the verdicts in Ballard v. Fire Insurance Exchange and Anderson v. Allstate Insurance Co., have caused insurers to eliminate coverage or to limit coverage for any type of fungus, including mold.

Financial Responsibility Committee Formed by ERRA
ERRA has formed a new committee to serve as a venue for stake holders in the Proof of Financial Responsibility for Environmental Damages debates and studies that are taking place all over the United States. This affects Underground storage tanks, waste treatment storage and disposal facilities and mine reclamation.

Written in the 80's the current laws have serious flaws that are disliked by site owners/operators and the suppliers of financial responsibility mechanisms a like. More than half of the currently acceptable mechanisms for proof of financial responsibility fail to pass a crash test where the operator and the mechanism for proof of financial responsibility fail in tandem. This is exactly what the concept of proof of financial responsibility was designed to avoid, so even the regulators are frustrated with the current regulations.

The committee is chaired Rick Thomas, JD, a veteran of the surety industry for reclamation bonds. It will have its own section of the ERRA site including a chat room, an ask the expert feature for knowledge sharing and a newsletter for committee members.

The committee is open to ERRA members. Special discounts for government employees are available. Contact ERRA at webmaster@erraonline.org or 608-798-2904 to join.

Registered Environmental Insurance Professionals Directory
To find leading experts in environmental insurance, mold insurance, environmental risk management and expert witnesses on environmental insurance issues look to the Registered Environmental Insurance Professionals Directory. The directory includes active members of the Environmental Risk Resources Association who have shown a commitment to expanding their knowledge of environmental risk management. If you are a member of ERRA and would like to be included on the lists or to update your information, please email the webmaster@erraonline.org.

An ERRA member has access to the "members only" area of the ERRA web site which contains a number of environmental risk management resources tailored for the risk management professional. A member also receives substantial discounts to the Environmental Insurance Forums and quarterly newsletter. You may become a member by completing the online membership form or printable membership form. For more information click here.

Mold Risk Management Seminars

Insurance agencies have the option to turn mold into gold or decide to pour professional liability dollars into a bottomless pit. With expected professional liability losses in 2005 of $4,000 per licensed insurance agent, turning mold into profitable insurance business for the insurance agency is a much better alternative. ERRA has created a seminar series to enable insurance agencies to avoid professional liability for their clients unintentionally uninsured mold claims at the same time the agency moves into the lucrative field of environmental insurance production. A full description of the two part seminar can be found at http://www.erraonline.org/moldeoseminar.html, call 608-798-2904
or email webmaster@erraonline.org.


Environmental Risk Resources Association
4901 Pine Cone Circle, Middleton, WI 53562

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