Climate change and insurance / Christina M. Carroll [and others].
2012
KF3783 .C5784 2012 (Map It)
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Details
Title
Climate change and insurance / Christina M. Carroll [and others].
Published
Chicago, Ill. : American Bar Association, Tort Trial & Insurance Practice Section, [2012]
Copyright
©2012
Call Number
KF3783 .C5784 2012
ISBN
9781614387336 (pbk.)
1614387338 (pbk.)
1614387338 (pbk.)
Description
xiii, 238 pages ; 26 cm
System Control No.
(OCoLC)811239090
Summary
Publisher description: Climate change has become a significant issue in scientific, political, and legal circles, and this may have profound implications for the insurance industry. More frequent catastrophic events such as floods, droughts, fires, hurricanes, and the like, whether or not attributable to climate change, challenge the insurance industry's abilities to measure and predict risk. Climate Change and Insurance is the first publication of its kind and the definitive resource for anyone seeking to understand the complex risks and opportunities associated with climate change and its potential impacts on the insurance industry. Climate Change and Insurance delves deep into the issues surrounding both current and emerging legal aspects. The book extensively covers the topic, including: Overview of climate change and insurance issues Background on climate change, global warming, and greenhouse gases Climate change as an emerging risk Greenhouse gas-related regulation Existing and emerging climate change related litigation Related issues such as sustainability, greenwashing, and greenbuilding Intersection of climate change and insurance Implications for commercial general liability (CGL), directors and officers (D & O), environmental liability, professional liability, and renewable energy-related policies Potential claims liability and potential exposure drivers Offering a wealth of information and practical insights, Climate Change and Insurance is a must-have reference for understanding and managing the potential impacts of climate change on insurers, the companies they insure, and other key stakeholders.
Bibliography, etc. Note
Includes bibliographical references and index.
Record Appears in
Gift
Gift of Prof. Michael Gerrard
Added Author
Added Corporate Author
Gift
The Arthur W. Diamond Law Library
Gift of Prof. Michael Gerrard
Table of Contents
About the Authors
ix
Acknowledgments
xiii
ch. 1
Climate Change and Insurance: An Overview
1
A.
Potential Exposures
2
1.
Potential Enterprise Liability
2
2.
Potential Claims Liability
3
B.
Implications by Coverage Type
4
C.
Risk Management and Product Development Considerations
8
1.
Potential Enterprise Liability
8
2.
Potential Claims Liability
9
ch. 2
Climate Change, Global Warming, and Greenhouse Gases: Background
11
A.
Defining "Global Warming" and "Climate Change"
11
B.
Importance of Definitions in the Insurance Context
13
C.
Greenhouse Gases and the Causation Issue
14
D.
Greenhouse Gases (GHGs)
16
E.
Conclusion
20
ch. 3
Climate Change as an Emerging Risk and Comparison to Historic Emerging Risks
21
A.
Climate Change as an Emerging Risk
21
B.
Evolution of Other Emerging Risks
22
ch. 4
Likely Plaintiffs and Targets of Emerging Climate Change-Related Litigation and Regulation
25
A.
Potential Impacts and Likely Claimants
25
B.
Targets/Defendants
26
1.
Emitters of GHGs
26
2.
Service Providers to Targeted Emitters
30
3.
Impact to Insurers
31
ch. 5
Existing and Emerging Climate Change-Related Regulation
33
A.
International Backdrop
34
B.
National Regulation
38
1.
EPA Action Pursuant to the Clean Air Act
38
a.
Massachusetts v. EPA
39
b.
EPA Endangerment and Cause or Contribute Findings for GHGs
40
2.
EPA and NHTSA Light-Duty Vehicle GHG Standards and Corporate Average Fuel Economy Standards ("Tailpipe Rule")
43
3.
EPA Timing Rule
44
4.
EPA's GHG Reporting Rule
45
5.
EPA Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule
46
6.
Standards of Performance for Carbon Dioxide Emissions for New Stationary Sources: Electric Utility Generating Units
50
7.
Potential Impact of Emerging Clean Air Act Regulation on Climate Change-Related Litigation
51
C.
Congressional Action
51
D.
Regulation and Potential Litigation Related to Carbon Storage
52
E.
Renewable Energy: An Overview
53
F.
State and Local Regulation
56
G.
Regional Agreements
59
H.
State Insurance Regulation
61
1.
National Association of Insurance Commissioners (NAIC)
61
a.
NAIC Climate Risk Disclosure Survey
62
b.
2011 Ceres Report on 2010 NAIC Survey Results
63
c.
Recent NAIC Activities
65
d.
California, New York, and Washington Mandatory Survey
66
2.
California Green Insurance Act of 2010
66
3.
Pay-As-You-Drive Regulations
67
ch. 6
Climate Change-Related Litigation
69
A.
Common Law Tort Litigation
70
1.
Climate Change-Related Tort Litigation: An Overview
70
2.
American Electric Power Co. v. Connecticut
71
3.
Kivalina v. Exxon Mobil Corp.
76
4.
California v. General Motors Corp.
80
5.
Tort Litigation Related to Episodic Climatic Events
81
a.
Turner v. Murphy Oil USA, Inc.
81
b.
Comer v. Murphy Oil USA, Inc.
82
6.
Future Trends: Climate Change-Related Tort Litigation
87
a.
Additional Types of Claims Including Products Liability
87
b.
Causation Issue
88
c.
Foreseeability
91
B.
Climate Change-Related Insurance Coverage Litigation: An Introduction to AES Corp. v. Steadfast Insurance Co.
92
C.
Public Trust Litigation
93
D.
Claims for Natural Resource Damages Pursuant to CERCLA
95
E.
Claims Arising out of Corporate Disclosure and Management of Climate Change Risk
97
1.
Shareholder Resolutions Related to Climate Change
98
2.
Potential Litigation Related to Misrepresentation, Concealment, or Mismanagement of Climate Change Risk
102
3.
Role of the SEC in Climate Risk Disclosure
102
a.
Background: Petitions to the SEC for Further Regulation of Climate Change Risk Disclosure
102
b.
Current Securities Laws, Regulations, and Guidance Requiring Disclosure of Climate-Change Issues
104
4.
Climate Change-Related Activity in New York Pursuant to the Martin Act
106
5.
Voluntary Climate Change Disclosure Programs
108
a.
Carbon Disclosure Project
108
b.
Principles for Responsible Investment
110
c.
Dow Jones Sustainability Index
111
d.
FTSE4Good Index Series
112
e.
Climate Registry
114
f.
Periodic Stakeholder Reporting (Annual Reports)
115
F.
Potential Litigation Arising out of Efforts to Address Climate Change Issues
115
1.
Utilization of the National Environmental Policy Act (NEPA) and State Environmental Policy Acts (SEPAs) to Address Climate Change
115
a.
National Environmental Policy Act (NEPA)
115
b.
State Environmental Policy Acts (SEPAs)
117
c.
Implications
119
2.
Disputes Arising out of Carbon and GHG Markets
120
3.
Greenwashing Litigation
122
a.
Greenwashing and Consumer Actions Related to Misleading or False Advertising
123
b.
Federal Trade Commission Focus on "Green" Marketing
128
4.
Green Building Litigation
129
a.
Green Building Standards
130
b.
Litigation Resulting from Governmental Legislation and Regulation
131
c.
Contractual and Other Disputes
132
G.
Potential GHG-Related Enforcement Actions
134
ch. 7
Intersection of Climate Change and Insurance
135
A.
Existing and Emerging Climate Change-Related Exposure Arising out of First- and Third-Party Coverage of Insureds ("Potential Claims Liability")
135
1.
Overview of Potential Claims Liability
135
2.
First-Party Coverage
136
a.
Implications for Property Coverage
136
b.
Implications for Property (Time Element) Coverage
136
3.
Third-Party Coverage
138
a.
Implications for D&O Coverage
138
b.
Implications for Commercial General Liability Coverage
141
c.
Implications for Environmental Liability Coverage
143
d.
Implications for Professional Liability/E&O Coverage
144
e.
Implications for Contractor's Protective Professional Indemnity and Liability Insurance and Owner's Protective Professional Indemnity Insurance
145
4.
Potential for Bad Faith Claims
146
a.
Bad Faith Claims Based on Inconsistent Position on Climate Change-Related Issues
146
b.
Bad Faith Claims Based on Denial of Coverage
146
B.
Emerging Climate Change-Related Exposure: Potential Enterprise Liability
147
1.
Potential Liability Based on Corporate Disclosures
147
2.
Potential Liability Related to Provision of Loss Control Consulting Services
148
C.
New Applications of Existing Coverages and New Products
148
1.
Traditional Insurance Products for Renewable Energy Projects
149
a.
Property Insurance
149
b.
Boiler and Machinery Insurance
150
c.
Commercial General Liability Insurance
151
2.
Insurance Policies Tailored for the Renewable Energy Industry
151
ch. 8
Potential Claims Liability: Potential Exposure Drivers
153
A.
Claims-Made and Reported
154
1.
Claim Must Be Made During the Policy Period or Extended Reporting Period
155
2.
Retroactive Date Requirement
156
B.
Occurrence-Based
156
1.
AES Corp. v. Steadfast Insurance Co.
156
2.
Cinergy Corp. v. Associated Electric & Gas Insurance Services, Ltd.: Damages Not Caused by An Occurrence
159
3.
Effect of the "Trigger" on Occurrence
160
a.
Exposure
161
b.
Manifestation
161
c.
Injury-in-Fact
162
d.
Continuous
163
4.
Long-Tail Claims
164
C.
Pollution Exclusions and Grants of Pollution Coverage
164
1.
Definition of "Pollutant"
164
a.
Interpretation of the Term "Pollutant"
165
b.
Whether GHGs Are Pollutants
167
2.
Pollution Exclusion
170
a.
Three Types of Pollution Exclusions
171
b.
Time Element, Limited-Pollution Coverage Endorsements
177
c.
Special Issues Associated with Pollution Exclusions in the D&O Context
178
3.
Grants of Pollution Coverage
179
D.
Other Potentially Relevant Exclusions
180
1.
Bodily Injury and Property Damage Exclusion in D&O Policies
180
2.
Expected or Intended Injury Exclusion
181
3.
Known Loss, Known Injury or Damage, Loss in Progress Clauses
183
4.
Preexisting Conditions Exclusion
185
5.
Injunctive Relief Exclusion
186
6.
Maintenance/Betterment Exclusions
187
7.
Punitive, Treble, Exemplary, or Multiple Damages Exclusion
187
8.
Fines, Penalties, and Taxes Exclusion
188
9.
Intentional/Criminal Act Exclusions
189
E.
Limitations
191
1.
Defense Within or Outside of Limits
191
2.
Batch Clauses/Multiple Claim Clauses
191
3.
Anti-Stacking Clauses
192
F.
General Conditions: Notice Requirement
193
G.
Will Exposure Drivers Result in Exposure?
194
Glossary of Acronyms & Terms
197
Index
225