A recent report from the United Nationals Industrial Development Organization highlighted the importance of manufacturing in providing an increasing variety of goods at prices that decline relative to those in other sectors of the economy.
However, manufacturing also presents some of the most obvious environmental exposures, which span multiple industry sectors and segments. Any business with operations involving the use of bulk materials, chemicals, fuels, packaging, heavy process machinery or involved in the ‘added-value’ process of producing final products through assembly may have a significant potential pollution liability exposure which should be fully explored.
Particularly where water bodies are concerned, concealed site infrastructure is often the cause of losses through gradual pollution events, costs further exacerbated by the ensuing legal action and long term remediation required.
Within specific sectors, the food and drink manufacturing industry has many avenues for which a pollution event could take place, with regulators having an equivalent raft of regulation to enforce. Any producer should be factoring in environmental coverage concurrent to their main insurance programme.
Pharmaceuticals and chemical manufacturing also carries a number of hazards heightening the environmental risk and probability of a pollution event. Even in a sector where most territories have increased licence and permit requirements in force, it is more often than not the failure of secondary containment and control measures which lead to major pollution incidents, providing major losses.
WHAT WE DO
With firms of all sizes benefitting from the advent of globalisation, it is important to ensure they have not only considered their operational risk, but also factored in the varying legalities within their operating territories as well as the potential impact of environmental events on their supply chain and customer base.
Environmental policies can be tied to business operations, allowing for a combined property and operational risk solution covering as far as business interruption, bodily injury and crisis management as well as clean-up, litigation and defence coverage.
We have partnered with clients and insurers to provide cost-effective solutions and have broad experience in metals recycling and processing plants; waste treatment facilities; food manufacturers and distributors; and global pharmaceutical companies among other areas.
Pharmaceutical and chemical manufacturers in particular should consider the potential impact their operation could have on their surrounds (both above and below ground) and their ability to deal with local regulators when handling a pollution event.
Another key consideration is the impact to persons through a potential contamination issue leading to bodily injury claims.
JLT has a track record of securing broad coverage for manufacturers. Our environmental team is an important part of this offering and has a number of products available to those seeking to avoid uninsured losses impacting on their operations and reputation.
Companies see environmental exposures as one of their biggest emerging risks and our global team have the underwriting, engineering, consulting, claims and wordings expertise to provide market leading advice.
This expertise has resulted in a 200% increase in the level of environmental placement in 2017-2018. This has been matched by a doubling in size of the environmental specialist team, which has access to GBP 400 million of environmental capacity in Lloyds and London markets.
Our specialist knowledge of key industry areas is complimented by strong and diverse relationships across the specialty insurance market and access to traditional and emerging markets through the JLT International Network.
We work closely with clients to structure a policy that mirrors their risk profile and transfers the appropriate level of risk to the right insurer.
Additional services include:
- Programme gap analysis - identifying coverage gaps in existing programmes, discussing how these could impact a business and the extent to which they can be covered
- Global programme advice - including where legal and regulatory regimes may require local policies or heightened environmental due diligence
- Risk solutions - through our engineering team, we are able to provide fee-based surveys and advice to support clients in reducing programme premiums
- Claims liaison and support - our claims advocacy team have experience across a number of complex environmental claims, ensuring the best interests of our clients are represented.