PRODUCT: ERMI High Net‑Worth Pollution Insurance

COMPANY: Not yet disclosed

BEST RATING: Coverage is written with a carrier rated A++ (Superior).

AVAILABILITY: Coverage is available through Environmental Risk Managers, the MGA.

FOCUS: Picture this: A high net‑worth individual owns a house boat and hires a mechanic to do some maintenance work on the engine. The mechanic mistakenly connects the bilge pump to the fuel line and leaves to take a lunch break. When he returns, the emergency vehicles are already onsite and the booms are already out in the water.

“For the hour he was gone for lunch, this thing was just pumping fuel out into the marina,” says Chris Bunbury, president & owner of Environmental Risk Managers (ERMI), who witnessed this scenario in real life. “As the boat owner, you may not even do anything wrong. But whoever owns the boat is responsible, because it’s their boat.”

Think this type of situation is few and far between? Think again. From yachts and jets to ranches and multiple homes, high net‑worth insureds have a wide range of assets that could potentially result in an environmental liability claim from human error, mold, fertilizers, cleaning and maintenance operations, natural resource damages and much more—and most, if not all, do not have coverage for environmental exposures under their current insurance plans.

“The overwhelming majority of high net‑worth individuals don’t even realize they’re self‑insuring their environmental exposures,” Bunbury explains. “When you have an environmental loss, you’ve got the federal government, the state government, the press and the neighbors pounding on your doors looking for answers and solutions. This isn’t a fender bender. You need someone to run damage control central.”

ERMI’s High Net‑Worth Pollution Insurance program includes coverage for defense costs—paramount in what Bunbury calls “a young, litigious field”—as well as access to specialists who can assist in management of claims, public relations, emergency response, government compliance and finances.

And because the impact of environmental losses is often widespread, the policy also covers the cost of claims that come in from third parties for bodily injury, property damage and third‑party business income. “Where did your loss occur? Are you that boat in the marina and now all of a sudden the marina shut down, boats can’t get in or out, they can’t sell gas? Those businesses are going to want to be compensated for that,” Bunbury explains.

UNDERWRITING: Coverage options include: environmental impairment liability, for those who own, operate, lease or have any insurable interest in real property and operations; property transfer, which protects a new owner or any party with an insurable interest against unknown environmental conditions that may be discovered during the policy period, but were not caused by the new owner; contractors pollution liability, to protect insureds from liability should a hired vendor cause or exacerbate an environmental condition while performing services; transportation pollution liability; underground storage tanks; aviation pollution, to close aviation policy coverage gaps for pollution liabilities while the aircraft is idle or parked; marine pollution, to close marine policy coverage gaps for losses not related to the operation of a watercraft; and emergency response costs.

Limits with the primary carrier can reach $50 million, but “we can go about as high as they want, because we’ll build a tower with other carriers if we need to,” says Bunbury, who adds that the application process is simple and 100% customizable to meet each individual insured’s needs.

For example, “if they want coverage for site pollution and pre‑existing unknown contamination, then we’ll require site assessments for that,” Bunbury explains. “But if they just want new conditions from the date of inception going forward, all we need is an application.”

MINIMUM PREMIUM: $3,000.

TARGET: Individuals or couples with a net worth of $10 million or more. “Even if you’re worth $30‑$40 million, if you get a $1 million bill, you’re going to have to start selling some things and reworking some financial packages,” Bunbury points out. “If you could have transferred that risk for fractions of a cent on a dollar, and not had to worry about disrupting your portfolio or your investment strategy, wouldn’t you rather do that than pay for it out of your own pocket?”

COVERAGE TERRITORY: All 50 U.S. states. Coverage applies in the U.S. and all territories.

CONTACT: Chris Bunbury, president & owner, ERMI; PO Box 1127, Leland, Michigan 49654; 231‑256‑2122.