On Tuesday, insurance giant AIG announced a major restructuring designed to make it a “more profitable and focused insurer.” Apparently as a result of these efforts to streamline and slim down, AIG has begun notifying holders of its
Pollution Legal Liability insurance that it will no longer be underwriting new policies. Existing policies will be honored, but renewal will not be available. AIG will reportedly continue to write Contractors Pollution Liability and Environmental and General Liability Exposure policies.
Entities seek Pollution Legal Liability (PLL) insurance in order to address a variety of environmental liabilities. Increasingly, lenders are requiring such coverage in property transactions. Property owners may also face regulatory cleanup requirements related to underground storage tanks or other environmental hazards. Other drivers for the purchase of PLL insurance include contractual requirements and general risk management.
AIG was a major player in the PLL market place, but upwards of 20 other insurers also provide such policies. A recent market survey of PLL notes that underwriting scrutiny has increased in recent years while terms and conditions of coverage have tightened. Other providers offering PLL include Beazley, Zurich, and the newly combined ACE-Chubb.