Friday, December 3, 2010

Climate change insurance alert

Richard J. Berrow and Ron Ezekiel of Fasken Martineau (a law firm) in …If the scientific global climate models are accurate, the present problems will be magnified in the near future. These models suggest that we should expect: increase in the frequency and severity of heat waves, droughts, bush fires, tropical and extra tropical cyclones, tornados, hailstorms, floods and storm surges in many parts of the world; new exposures (like hurricanes in the South Atlantic); and more extensive damage, economic, social, and environmental impacts from weather-related disasters."

…Although no one has yet successfully sued a company for climate change damage allegedly caused by greenhouse gas ("GHG") emissions, lawsuits blaming industrial emitters for global warming, extreme weather events and other natural disasters are pending in Alaska, Washington, D.C., California and Louisiana. Shareholder resolutions to force companies to limit their carbon emissions are becoming commonplace, and corporate executives and risk managers are becoming ever increasingly concerned about business risks related to climate change. Our previous update, reviewed some of these risks.

Although climate change issues and claims are still relatively novel concepts,this overview highlights the extent to which such risks may be covered under a corporate policyholder's insurance program. In particular, we discuss the policies that most businesses already should have in their portfolios: comprehensive general liability, directors and officers liability, and first-party property damage and business interruption policies.. Our discussion is, of course, necessarily general in approach. In every case, the specific language of each policy will ultimately determine whether coverage exists.

Accordingly, we recommend that risk managers, with the assistance of insurance counsel, carefully review their potential GHG exposures and assess the adequacy of their existing or proposed coverage programs….

A courtroom in Brockville, Ontario, shot by P199, under the Creative CommonsAttribution-Share Alike 3.0 Unported license

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