Two Exposures Top Buyer Concerns

As risk manager for Panattoni Development Company, one of the largest privately owned commercial real estate companies in the United States, Guillermo Accame makes it his business to stay current with trends impacting the environmental insurance market. Today, two issues are top of his mind—the first of which is vapor encroachment.

“Vapor encroachment is a topic that sophisticated buyers and underwriters have been aware of for at least 10 years, but it had really been a back-burner issue,” Accame says. “Today, regulators are much more aware of it, and [coverage] has definitely heated up as a result.”

Encroachment involves movement of vapor pollutants from underground sources to the inside of buildings. Public awareness of health hazards associated with airborne pollutants and air quality has been growing, and testing organization ASTM’s E2600 standard, revised in 2010, created new guidelines for site screening.

Panattoni requires ASTM E2600-10 Tier 1 Screening as part of all its Phase 1 environmental site assessments. However, the challenge for insurance buyers and underwriters alike is that potential exposure to vapor encroachment is difficult to predict.

“Indoor air quality can vary by season, by wind speed, whether windows are open, how well the HVAC system is operating, and due to off-gassing by commonly used man-made materials such as carpets inside buildings,” Accame says.

The second issue on risk managers’ minds is mold. “Mold can grow anywhere there is moisture,” Accame says, noting that like vapor encroachment, potential mold exposure is difficult to pinpoint.

“Mold is affected by systems and processes that you might not be aware of when you assess or underwrite a property and that can change over time,” he explains.

Accame is commonly seeing sub-limits on mold coverage, and expects to see further limitations going forward. “In the future, policies that cover mold may be contingent upon certain things, such as proper roof maintenance and functioning of HVAC systems,” he predicts.

Comments

Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Union used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Agent & Broker Insider eNewsletter

Proven success tips and essential information to help agents and brokers grow their practice – FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.