Of all the business professionals highlighted in the environmental Strategist® (eS) TEAM SPORT series, attorneys represent the lowest-hanging fruit for insurance agents.

Because attorneys tend to specialize in specific areas of law, they’re usually well-versed in their area of expertise but possess very little knowledge about environmental exposures.

Today’s transparent business environment changes the way attorneys must address their clients’ environmental exposures, which translates into opportunity for insurance professionals. Here are four areas you can use to start the conversation:

Indemnification. For years, attorneys have utilized environmental indemnifications in real estate buy/sell agreements, mergers & acquisitions, and many other legal transactions. Generally speaking, attorneys feel content to address potential environmental exposures with an environmental indemnification—but fail to back it up with a financial assurance mechanism such as a bond, a letter of credit, monies on deposit or an insurance policy.

This creates a professional liability exposure for the attorney: By failing to put a financial assurance mechanism in place to support the contract, the attorney risks clients coming back to them for the financial solution.

Warranty applications. Sometimes, attorneys require financial assurance to backstop indemnifications contained in a contract. They generally achieve this through standard property-casualty and environmental insurance policies, with evidence of coverage in the form of a certificate of insurance.

The problem with this strategy is that a carrier will not issue an environmental insurance policy until they receive a completed and signed warranty insurance application. In general terms, this application states that the policy is being issued based on the signed warranty application and that the application becomes part of the policy.

The application goes on to state that at the time of loss, the carrier may deny coverage if they discover the application was not accurate. Without first confirming the accuracy of the warranty application, the COI may not be worth the paper it is written on. The same is true for the attorney’s financial assurances in the contract.

Coaching attorneys to understand warranty applications fills a gap in their financial assurance strategy in contracts, in addition to a massive professional liability exposure.

Definition of ‘pollutant.’ Generally, an environmental indemnification in a contract defines “pollutant” as smoke, vapors, soot, fumes and acids. But based on the way courts and insurance companies have responded to lawsuits and insurance claims, a better definition of “pollutant” is any material, substance or product that is introduced to an environment for something other than its intended use or purpose.

In other words, anything that ends up where it does not belong can be a pollutant—including fresh water, milk, cheese, fruit, beer and more.

Defense costs. Environmental insurance policies pay for defense costs. Do you think an attorney would rather collect their fees from a financially solvent insurance carrier, or a client that just found out they contaminated half their town’s drinking water?

By TEAMing with attorneys to manage and transfer a client’s environmental exposures, you position yourself as a trusted adviser and strategic partner—while also driving sales for your own insurance products.

Chris Bunbury is president of eS and Environmental Risk Managers.