The Lull Before the Storm: Climate Change and Its Potential Significant and Imminent Impacts on Professional Lines
The parameters of the climate change problem are not yet fully understood. Some scientists, however, predict more storms, stronger storms, flooding, droughts, wildfires, water supply problems, and heat waves, just to name a few potential impacts of shifting climate patterns. In a report set to be published this summer, the UN estimates that the activities of the world’s top 3,000 companies contribute to $2.2 trillion worth of environmental damage annually, half of which they attribute to greenhouse gas (GHG) emissions. Thus, regulators on the local, state, national, and international levels are grappling with how to manage and reduce GHG emissions.
Although the regulatory framework is unsettled, companies are trying to determine what to do, if anything, about climate change. Some stakeholders are also looking for new opportunities arising out of the climate change debate such as green building, carbon footprinting, and climate change-related consulting. There may be few claims now but this political climate may increase the frequency and severity of (1) errors and omissions claims against engineers, architects, consultants, accountants, and other professionals doing climate change-related work and (2) claims by shareholders and regulators against directors and officers who now must navigate and manage the climate change problem for their corporations. This article explores the potential rising E&O and D&O exposure from climate change-related claims and associated coverage and underwriting issues.