The insurance industry is responding well to the challenge ofglobal warming producing products and striving to make clientsaware of the risks they face, an attorney specializing in thepractice said.

In a Web seminar on the issue of global warming, attorneyWilliam F. Stewart with the law firm Cozen O'Connor in WestConshohocken, Pa., discussed the challenges and opportunitiesbusinesses and individuals face as the Earth becomes warmer.

The Web seminar was sponsored by Malvern, Pa.-based TheProfessional Association of Chartered Property CasualtyUnderwriters.

Mr. Stewart said while there are dissenting views on thesubject, the overwhelming consensus viewpoint among scientists isthat global warming is occurring because of human activity, and thecontinued rate of warming, if nothing is done about it, could meandire consequences for the planet.

The extent of the consequences, he said, will depend on how warmthe Earth becomes, but there is growing evidence of an impact fromloss of ice and permafrost in some northern regions of the globe,he noted.

Other consequences from global warming will be increased severeweather events and flooding. The changes could also bring on lethalheat conditions where some predict temperatures could get up to 110degrees in Chicago or 112 degrees in Los Angeles. This, he said,would have “tremendous health consequences” for everyone.

The insurance industry, said Mr. Stewart, is responding to therisk of global warming and making decisions that will impact peopleand alter their behavior for the better.

Some European insurers have formed foundations to deal with theissue and 35 percent of the industry has introduced new insuranceproducts to account for risks such as the replacement of greenbuildings.

Insurers are participating in “adaptation programs” with theintroduction of new products, support of stronger building codeenforcements, weather derivatives products and refusing tounderwrite in areas where the risk is deemed to great, Mr. Stewartexplained.

He said this action will cause builders and homeowners toreconsider building in areas susceptible to the increased risk offlooding, hurricanes or fire caused by global warming.

“The insurance industry is engaged in the climate changeindustry, but the challenges are just presenting themselves,” saidMr. Stewart.

Another area of concern, according to the attorney, is the risein directors and officers litigation stemming from global warmingissues.

He said some future risks could involve not properly planningfor taking advantage of cap-and-trade programs to make full use ofthe economic advantages present.

Executives, advised Mr. Stewart, should also concern themselveswith nuisance lawsuits that contend the business may have actedinappropriately or ignored the global warming issue to itsdetriment to shareholders.

How this ultimately may play out with pollution exclusions isanother issue to be dealt with by the courts in the future, notedMr. Stewart. The typical definition of pollution used in theexclusions, a contaminant or irritant, would not necessarily applyto carbon pollution, and insurers would need to provide the defensecosts they would normally have to provide with any othershareholders suit.

A replay of the event is available throughwww.cpcusociety.org.