NU Online News Service, June 21, 2:20 p.m.EDT

The dollar amount of environmental-insurance limits is on adownward trend, but that is not because of a lack of demand,according to a report from insurance broker Marsh.

On the contrary, Marsh says the percentage of clients purchasingpollution legal liability (PLL) and contractors pollution liability(CPL) policies has increased—nearly 10 percent more PLL policieswere sold in 2011 compared to 2009.

But in its “Marsh Insights: BenchmarkingTrends—Environmental Purchasing Trends” report, the broker, asubsidiary of the services firm Marsh & McLennan Companies,says purchasers of environmental-liability policies are purchasinglower limits and paying less than they were just a year ago.

Average limits have trended downward over the past four years,with average limits on PLL declining from $12.7 million in 2008 to$11 million in 2011. For CPL programs, limits went from $9 millionin 2008 to $7.4 million in 2011.

Marsh suggests that a major reason for this is that clients areno longer purchasing multi-year policies, opting for one-yearpolicies instead.

Loss experience and claims activity data has also “evolved,”giving insurance brokers and the insured better information onlimit requirements “allowing for more appropriately structuredprograms.”

“Overall, insureds are more carefully considering how theydeploy their insurance dollars in response to current economicconditions,” says the report.

Additionally, Marsh points out that there has been increasedcompetition in the marketplace, making it affordable to transfermore risk to an insurance program.

The report notes that deductibles have remained constant for PLLprograms at around $350,000, while CPL has dropped from a high of$304,000 in 2008 to $121,000 in 2011.