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Awareness Prompts Growth for Environmental Insurance

William Pritchard Jr. writes on what coverage should be available in contractors' environmental insurance, new regulations and how to turn a need into an opportunity for growth.

By William Pritchard Jr.,ERM | Updated on July 12, 2010
The dramatic economic events of the last several years have had a profound impact on the insurance industry. As a naturally cyclical business, insurance has suffered the double whammy of a softening market cycle coming during an economic meltdown never before seen in our lifetimes. Such a historic set of circumstances will leave an indelible mark on our industry. But while there are many challenges yet to be overcome, there is certainly reason for cautious optimism; much like the American spirit, the insurance industry is infinitely resilient and creative. A key beneficiary of the bounce-back we expect to see can be found in environmental insurance. How it can help an agent become more successful, and why agent must know about it, are topics worth considering.

It can be argued that contractors are the backbone of our economy. Without them, things wouldn’t be built or serviced, torn down or reconfigured. Clearly, the contracting industry has been hard hit by the economic downturn. The construction trades in particular, along with infrastructure and service industries, have all seen record decreases. Since most insurance is based on either payroll or revenues, while these industries have contracted, so have many insurance agencies’ revenues.

Related: Read “Drywall silt and green construction: LIability landmines?”

We are beginning to see a slow reversal of the steady decline of the last several years. Over the first four months of 2010, we have witnessed a noticeable stabilization in our contractor clients. Where we had seen annual double digit narrowing over the last two years, most renewals are now coming in slightly off, or flat, and in some cases, projecting some growth for 2010 into 2011. We are still seeing some contractors going out of business, but it seems that the ones who were going to fail already have.

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