Covering all your bases

In the wake of high-profile environmental incidents in the past few years, manufacturers and distributors are more aware than ever of the need for adequate insurance protection.

Increased scrutiny on environmental ­obligations, combined with the effects of a recovering economy in the US, means that seeking adequate insurance cover has never been so vital.

“When a catastrophic event occurs, the need for comprehensive insurance becomes a focus,” says Kerry Simon, executive vice president, chief underwriting officer, AIG Environmental. “It drives companies to consider buying additional cover. Also, as the economy improves, your business may grow which results in a need for additional coverage.

“Every business knows they need general liability coverage and as the market becomes more and more aware and better educated on their pollution exposures, they look to products like ours,” says Simon. “Our clients are very well informed and awareness is increasing, thanks to the efforts of the insurance market and the various associations.”

Alamy

Chemical distributors are committed to increasing industry safety, and remain focused on enhancing standards when transporting and storing goods. Should the worst happen, however, they need to be confident that their insurance coverage will provide efficient and effective support to help minimise losses, protect reputations and reduce downtime – no matter the scale or severity of a claim.

AIG Environmental has been actively involved with the National Association of Chemical Distributors (NACD) for over a decade and is the association’s Diamond Sponsor.

According to the latest statistics published by NACD, the distribution sector not only continues to flourish but is seeing very high safety standards.

SAFETY FIRST

After several tough years, business is picking up with NACD member companies making a delivery every 7.3 seconds. In 2013, members drove over 140.7m miles (226m km) and shipped 26.3m tons (23.9 tonnes) of product, while generating around $31.2bn (€24.7bn) in sales. The average value of each shipment has climbed above $7,270 – almost double that of two years ago. Figures also show that the safety record of NACD members is more than twice as good as all manufacturing combined.

“We are starting to see companies who have not previously purchased an environmental coverage are now recognizing the need for this type of protection,” says Thomas Orabona, executive vice president, division head, casualty. “Companies are becoming more familiar with the financial impacts an environmental liability can have on their business, and how important it is to have the proper insurance policy in place to protect them from these issues.”

AIG Environmental offers various insurance programs designed to meet the very ­specialised needs of its clients. Whether it’s a standard policy providing insurance for a single storage tank or a more sophisticated plan for site-specific pollution legal liability coverage, AIG insurers can meet their ­requirements.

Its Environmental and General Liability Exposures (EAGLE) Program® is designed to provide a single policy that merges commercial general liability (CGL) and pollution legal liability policies, helping to eliminate potentially costly gaps in coverage. EAGLE also boasts a $25m limit for that exposure.

“From a chemical distribution standpoint the EAGLE program is a perfect fit,” says Orabona. “We will work with the client to tailor-make a policy to their specific needs. Whatever the size of the business, the EAGLE policy can be a solution – offering General Liability and Environmental Liability all on one policy form helps to eliminate potential gaps associated with a standard market placement.

“There’s a single underwriter dealing with their general liability, their environmental liability, transportation and their excess. We are unmatched in the industry, and have the resources dedicated to manage any risk and exposure.”

TAILOR-MADE SERVICE

Simon points out that distributors already have vigorous protocols in place to ensure their operations are running smoothly, efficiently and safely – and that reflects on the type of coverage and premiums AIG insurers can provide. The team looks at every single client specifically and puts together the most comprehensive and competitively-priced program possible.

“When we meet with the client, we have a dedicated group of engineers that works closely with our underwritering team to provide information that perhaps isn’t captured on the application,” she says.

“We do a walkthrough and really try to stand in the clients’ shoes to fully understand their operations so we can put together the best program. It’s more than just educating the client about our policy language. The retaining of insureds and getting new business is relationship driven.”

Rex Features AIG Environmental works closely with policyholders to manage claims quickly

AIG Environmental has been in this industry for over three decades and prides itself on its knowledge base and expertise, she says. This accumulated experience proves invaluable to clients when they’re evaluating their current exposures and loss potential.

“Another thing that really set us apart from the competition is our offering of value added services to the clients – we offer more than just an insurance policy, we offer a partnership,” says Orabona.

“We know the chemical distribution business, we understand what they do and have to deal with. Our policies are not cookie-cutter – they’re not off the shelf. They are tailored to our clients’ specific needs,” he says. “You can’t compare one of our customers to another because their exposures and what they’re doing from a risk management standpoint is different – so the product offering needs to be different.”

The Pollution Incident and Environmental Response® (PIER) program has also proven popular and offers additional support in the event of an emergency. Essentially, this is a service that allows AIG insurer policyholders the ability to enlist the help and expertise of a network of specialist contractors at pre-negotiated rates.

“Our PIER program really sets us apart from our competitors, providing AIG’s insureds with access to around the clock emergency response,” notes Simon. “The program provides access to a team of qualified contractors that can help with controlling remediation costs with the goal of minimising the overall liabilities. We have enlisted contractors all over the country. We’ve built this program up over the years and are constantly making sure the program has the right contractors to meet the different needs of our insureds.

“AIG Environmental will continue to be ­innovative and bring in new products,” she ­insists. “We like to be the first to the table with anything new but we’re also trying to put things in place that will be helpful to our insureds. We want to make it easier for our clients to do business with us. That’s our goal.”