ENVIRONMENTAL RISK PROFILES

1. ENVIRONMENTAL RISK PROFILES Jeff Slivka/Tim Squyres July 2006

2. Environmental Risk Profiles AGENDA • Risk Profiles – What and How? • Environmental • Professional Liability • Market Update • Environmental • Professional Liability

3. What is an ERP? • Structured management tool • Identify the environmental exposures • Administrative strategies to products and operations • Organizational impact • Responsibility • RM Options

4. How do you create an ERP? • Determine Objective of the ERP • Use of the ERP (corp, product, project, etc) • Communication • Maintenance/updates • ERP Keeper 4 simple step process

5. How do you create an ERP? • STEP 1 - Identifying Environmental Exposures • Operational exposures • Property related exposures • Waste/ debris disposal exposures • Transportation exposures Use data/information from past suits/claims/incidents

6. How do you create an ERP? • STEP 1 - Identifying Environmental Exposures • XL Environmental’s Exposure Checklist • See attached • Environmental documents • Internet Data Search • AGC EMS Documents • NDU ERPs – Industry specific • www.newdayunderwriting.com

7. Environmental Data Searches Las Vegas Blvd

8. How do you create an ERP? • STEP 2 – Organizational Impact • Identify and associate the impact the exposure can have on the organization • Financial impact? • Liability? First party exposure vs Third • Public perception? • Workforce?

9. How do you create an ERP? • STEP 3 – Responsible Personnel • Identify the person/position/people responsible • Company officers? • Safety managers? • Risk managers? • Legal counsel/dept? • Project director/manager? External Personnel – YOU!

10. How do you create an ERP? • STEP 4 – Risk Management Alternatives • Identify, select and implement all techniques to manage the exposure • Contract language • Insurance requirements • Environmental data searches • Product alternatives • Develop administrative/training programs • Physical inspections • Environmental insurance www.newdayunderwriting.com

11. How do you create an ERP? • ERP Examples • NDU Construction related ERP • NDU Manufacturing related ERP • AGC documents

12. How do you create an PLRP? • PLRP examples • NDU Contractors PLRP

13. An Update on the Environmental Insurance Marketplace

14. Environmental Insurance Marketplace • Carriers – 25 carriers • Major: AIG, XL, Zurich, ACE/Westchester, Hudson • Others: Evanston, Chubb, Arch, CNA, LIU, Everest, American Safety • 5 basic forms – PLL, CPL,Cost Cap, Secured Creditor, Finite/Liab Buyouts • Triggers – claims made v. occurrence • Capacity – limits, term, etc • Cost - steady • Coverage issues • Mold • Silica • Asbestos (naturally occurring) • EIFS • Manganese

15. Environmental Insurance Marketplace • Trends • Construction – Combined Professional/Pollution • Project CPL – term • Admitted v. non-admitted – 3 carriers

16. An Update on the Professional Liability Insurance Marketplace

17. Prof Liability Insurance Marketplace • Carriers – 20 carriers • Major: AIG/Lexington, XL, Zurich, CNA, • Others: Evanston, RAMCO, Arch, LIU, ACE/Westchester, Everest, Admiral • London: Beazely, Hiscox, ACE • Products – PL(A/E/Cs), PL/CPL, Protective • Capacity – limits, term, etc • Cost – 10% rate increase • Coverage issues • Mold • Silica • Asbestos (naturally occurring) • Residential/Condo

18. Prof Liability Insurance Marketplace • Trends • Project Professional Liability Issues • Structure of program • Lexington only willing to offer monoline • Carriers require practice program • Cost prohibitive to owner • Project Professional Liability Alternatives • OPPI • CPPI

19. Owners Protective Professional Indemnity • OPPI Highlights • Controlled by owner • Excess of underlying DP program • Coverages: • Indemnity • DIC • Third party defense • SIR applies • Minimum professional liability requirement of DP • Can include Contractors Pollution and mold • $25M capacity • Condo Projects

20. Questions? New Day Underwriting Managers LLC Bordentown, NJ www.newdayunderwriting.com