An Increase in Mass Tort and Environmental Claims Activity is on the Horizon: Prepare Now To Advise Clients About the Right Insurance

Environmental insurance has become a core element of corporate risk management programs, which are presently being utilized in commercial real estate transactions, sales of businesses, and to resolve mass tort and product liability litigation. Attorneys should consult with knowledgeable environmental insurance brokers to understand clients' environmental liability exposures. An environmental liability exposure can be related to a product, toxic tort, or cleanup of a hazardous waste site. In situations where there is a known potential environmental exposure, environmental markets assess the costs associated with the known environmental liability and provide insurance above those projected costs. This insurance is called “cost overrun insurance.” Environmental policies also insure against the risk of unknown environmental exposures. There are several ways to insure against this liability. For example, environmental policies can include combined coverage for general liability, products, and pollution. In addition, combined finite funding and risk transfer programs have been developed as a risk management strategy to address asbestos, silica, manganese, products liability, toxic tort and other general liability risks.

Environmental and mass tort claims are expected to increase, and it is essential that alternative forms of environmental insurance be explored as part of a company's financial