The Big Picture on Insurance and Climate Change March 2007 Presented by: Emerging Issues Subcommittee of the ABA Litigation Section, Insurance Coverage Litigation Committee

Disclosure David Brenner Fossil fuel reductions Emission controls New technologies New markets Global coordination / regulation Direct liability suits Water supply disruption Increased wild fires Soil erosion Economic sector disruptions More Megastorms Sallie Kraus Climate Change Melting Ice David Godwin Shifting Weather Patterns Susan Hogan Human Health Effects Karen Painter Randall Response & Remedies Walter Andrews Wind damage Coastal flooding Beach erosion Coastal inundation Rising ocean temperatures Heat stress Increased cancer risk Infectious disease exposure 1 st Party property damage Liability Developed areas Undeveloped areas Impact on ecosystems / fisheries Increased storms Possible catastrophic failure (loss of thermohaline warming / Gulf stream) Public works Continued development More flooding Loss of ecosystems Drought New infrastructure costs Early snow melt Agriculture Forestry Fisheries Utilities Consumer goods (esp. auto) Insurance Engineering / mitigation Tourism / recreation Benefits v. losses Regional deficiencies Tangible property damage Business interruption Flood exclusions Pollution exclusions Construction defect = CGL Engineering negligence = E&O Pollution = E&O Cold = 1 st party property damage If flooding not sudden = known loss If defective = CGL, E&O Crop failures = crop insurance Fire damage = 1 st party property Power outages = loss of inventory & = business interruption Marine losses = marine insurance Negligent design = E&O Regulatory liability = fines & penalties exclusions Securities disclosure = D&O = pollution exclusion? Pollution liability = EIL Product liability = CGL products / completed operations Design defect = CGL, E&O Construction defect = CGL, E&O Ecoterrorism = terrorism backstop / exclusions Regional conflict / property damage = war / terrorism exclusions Misrepresentations = D&O Guess wrong = D&O Life insurance actuarial risk Health insurance costs If defective Construction defect = CGL Engineering negligence = E&O Marginal cold weather sports = bodily injury = CGL Reporting/disclosure CGL = pollution exclusion

More Megastorms Sallie Kraus Wind damage Coastal flooding Beach erosion 1 st Party property damage Liability Tangible property damage Business interruption Flood exclusions Pollution exclusions Construction defect = CGL Engineering negligence = E&O Pollution = E&O

Melting Ice David Godwin Coastal inundation Rising ocean temperatures Developed areas Undeveloped areas Impact on ecosystems / fisheries Increased storms Possible catastrophic failure (loss of thermohaline warming / Gulf stream) Public works Continued development More flooding Loss of ecosystems Cold = 1 st party property damage If flooding not sudden = known loss If defective = CGL, E&O

Agriculture Forestry Fisheries Utilities Consumer goods (esp. auto) Insurance Engineering / mitigation Tourism / recreation Water supply disruption Increased wild fires Soil erosion Economic sector disruptions Shifting Weather Patterns Susan Hogan Drought New infrastructure costs Early snow melt Benefits v. losses Regional deficiencies Crop failures = crop insurance Fire damage = 1 st party property Power outages = loss of inventory & = business interruption Marine losses = marine insurance Negligent design = E&O If defective Construction defect = CGL Engineering negligence = E&O Marginal cold weather sports = bodily injury = CGL

Human Health Effects Karen Painter Randall Heat stress Increased cancer risk Infectious disease exposure Life insurance actuarial risk Health insurance costs

Fossil fuel reductions Emission controls New technologies New markets Global coordination / regulation Direct liability suits Response & Remedies Walter Andrews Regulatory liability = fines & penalties exclusions Securities disclosure = D&O = pollution exclusion? Pollution liability = EIL Product liability = CGL products / completed operations Design defect = CGL, E&O Construction defect = CGL, E&O Ecoterrorism = terrorism backstop / exclusions Regional conflict / property damage = war / terrorism exclusions CGL = pollution exclusion

Disclosure David Brenner Misrepresentations = D&O Guess wrong = D&O Reporting/disclosure