The current configuration of environmental insurance owes much of its structure to a series of legal calls that occurred 25 years ago. Prior to the mid-1980s, it was not uncommon for a judgment regarding pollution to go against a carrier providing general liability coverage when the event causing the claim could be shown to be other than "sudden and accidental," then the common wording to exclude coverage.

All of that changed in the middle and late 1980s. "Over time, attorneys challenged the pollution exclusions in the GL forms in use at the time. The majority of those exclusions did not hold up in court, so eventually carriers strengthened their exclusions," said Jeff Foering, vice president of Everest Insurance in Liberty Corner, N.J. "Ultimately, the GL carriers amended the wording until they arrived at something we now know as the absolute pollution exclusion. That's when the opportunities really began for underwriting and rating environmental risks."

Trenton Eversull, vice president of NECC Environmental in Slidell, La., believes that the rise in environmental coverage started with asbestos. "That's what really kicked things off. There has always been a market, but it really started booming there. That was followed by contractor's pollution, then lead, soil remediation, underground storage tanks, and mold."