By Brett Amick, Assistant Vice President, Manager of South Central Region
Beacon Hill Associates was approached by an agent on an existing Premises Pollution Liability policy we had placed with them. The insured had acquired a new operation and wanted to add it to the existing policy with the same terms and conditions. The current policy was a five-year term with new and pre-existing conditions as well as on and off site cleanup.
The new entity the insured had acquired was a 50-mile long steel pipeline that had been in the ground for over 60 years, and their current carrier was not interested in adding it to the existing policy. Beacon Hill Associates talked at length with the agent and several markets to gather the information needed to find coverage for this pipeline. The main issue was that in the purchase and sale agreement, the insured had agreed to indemnify the seller for prior liabilities as well as on-going liabilities. After gathering all the necessary information, including maps, spill reports, environmental reports, and monitoring and emergency response procedures, we were able to approach the open brokerage market. We were seeking new and pre-existing coverage that included on and offsite Bodily Injury/Property Damage (BI/PD), and offsite clean up. The underwriting concerns were primarily the age of the pipeline, the request for pre-existing coverage, the number of spills that had emanated from the pipeline as evidenced by their spill report, and the fact that pipelines are often not within carriers’ risk appetites as a result of recent claims activity resulting from them.
We approached fourteen environmental carriers with a submission. Half of these carriers immediately declined the risk. The others had questions that were addressed over a period of 6 weeks. During that time, more than half of the other carriers declined the risk during the course of responding to their questions. Ultimately, the remaining carriers had two questions: Does the insured plan to replace the pipeline with new construction materials and technology, and if so, how soon do they intend to do so?
The insured was not interested in replacing the entire pipeline. They had strict monitoring procedures in place, and were working with the engineer who had managed this pipeline for years when they bought it and felt very comfortable with their plan to replace the parts as needed. This issue caused all but one market to decline to quote the account. In the end, we were able to make the last company comfortable with the risk. We put together a two-year policy with a $5M per occurrence/$10M aggregate limit and a $100k Self Insured Retention (SIR), and new and pre-existing conditions that included onsite and offsite BI/PD with no restrictions. Clean up coverage was included on a sudden and accidental basis.
Although this was a complicated account, we were able to get the insured all the coverages they were contractually required to have. Both the agent and insured were very happy with the coverage and pricing.
This is one example of Beacon Hill’s experience in working with challenging accounts. Because of our extensive product knowledge, carrier relationships, and understanding of environmental risk solutions, we are a leading resource for agents who need guidance and access to top environmental and energy markets.