Environmental claims are increasing, by frequency and severity of loss, according to a recent survey by global risk management company Willis. The survey, Index for Environmental Insurance, indicated that for the second quarter of 2006, the recent pace of claims is higher than in previous years because of rapidly changing environmental legislation and increasing public awareness of environmental issues.

Willis' Index provides a quarterly update on several issues affecting the London underwriting market, based on a survey of insurers within various specialty lines, including environmental. According to a recent release, claims are on the rise, and Willis said it looks like the trend will continue.

Increased public awareness of environmental issues such as mold, asbestos, pesticides, and waste management brings with it increased potential for litigation action, according to the company — a trend that has been evident in the U.S. for some years but that is now starting to be seen elsewhere. If such litigation fails, defending the claim can be costly. Additionally, the provision of legal defense costs was considered by environmental insurers to be one of the main exposures they face, but also one of the benefits they can bring to an insured. Willis said that the claims seen so far most likely are the tip of the iceberg.