Insurers focus on mould risk

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Insurers focus on mould risk

Royal Gazette - Bermuda

By Jeannine Klein Menzies

http://www.theroyalgazette.com/apps/pbcs.dll/article?

AID=/20060217/BUSINESS/102170091

With Hurricane Katrina putting an exclamation mark on mould and

pollution exposure, brokerage firm Integro is anticipating more risk

managers will investigate environmental insurance programmes.

Integro, through its subsidiaries, is an insurance brokerage and

risk management firm which specialises in placing environmental

policies for entities ranging from real estate companies to chemical

plants. Headquartered in New York, it also has offices in Bermuda as

well as a handful of other major cities in the US and Canada.

Ed Morales, senior associate in Integro's San Francisco office, told

The Royal Gazette that the aftermath of the third quarter 2005

hurricanes which devastated the Gulf Coast sent a clear message to

commercial property owners that they must pay attention to mould

coverage if they have not done so in the past.

" The results of Katrina has really put [mould] on the front burner

in respect to considering mould as an absolute necessity for

coverage going forward, " he said adding that the environmental

insurance marketplace is " pretty robust " with most insurers willing

to offer such cover as long as they can underwrite to it.

" Certainly the advent of Katrina is really going to raise eyebrows

as to how they underwrite to mould, " he said.

While some of Integro's clients have previously forgone mould

coverage as well as pollution because the cost has been prohibitive,

Integro sees last year's hurricanes as a wake up call for

businesses. However the future cost of such coverage depends on

whether individual insurance companies are able to get their

reinsurers to work with them.

" [Prices] certainly have [gone up] on the property side so it may

overlap and impact the environmental side from the treaty

perspective and from reinsurers that may decide to pull out of

backing insurance companies that are providing mould coverage or

environmental coverage, " Mr. Morales said.

His colleague Kim, a principal in the San Francisco office,

adds that education is also important when it comes to environmental

cover since the typical risk manager is " probably not too familiar

with what environmental insurance can and cannot provide " .

" As they get more educated and find out the benefits to

environmental insurance the purchasing of environmental insurance

will increase, " Mr. Kim said.