ClimatelitigationriskIsthereshelterfromthestorm?wtwco.comClimatelitigationExploringtheimpactofclimatelitigationriskontheinsurancemarket.SusanDoeringMichelleRadcliffeMartinLockmanSeniorDirector,Director,ClimateClimateLawFellowHeadofClimateAnalytics,InsuranceandAssociateRiskManagementConsulting&ResearchScholaratSolutionsandGlobalTechnology.ClimatetheSabinCenterforClientAdvocate&InsurancelawSMEClimateChangeLawInthispaper,launchedtocoincidewithtools,scenariosandsystemstoidentify,assess,andNewYorkClimateWeek2023,wecombinemitigateclimatelitigationrisk,(re)insurerscanworkwiththeexpertiseofWTW’sSusanDoeringandtheirclientstoidentifyandmitigaterisk,resultinginaMichelleRadcliffe(CorporateRisk&Brokingmutuallybeneficialoutcomeforallparties.andInsuranceConsulting&Technologyrespectively),alongwithMartinLockman,Wefocusonahigh-leveldiscussionofrisks,mitigants,ClimateLawFellowattheSabinCenterforandopportunities,anddonotprovideanylegalClimateChangeLawandAssociateResearchadvice.ThequestionofwhetheranyspecificcostwillScholaratColumbiaLawSchool,tofocusonbecoveredunderaparticularpolicywilldependonatherelativelylesswelldocumentedimpactofnumberoffactors,includingdetailsoftheunderlyingclimatelitigationontheinsurancemarket.climatelawsuit,thewordingofanyrelevantpolicies,andthegoverninglawoftheapplicablejurisdiction.TheAsregulators,shareholders,andinvestorsincreasinglyhigh-levelframeworksdiscussedinthispaperemphasizefocusontheriskofclimatelitigation,itiscrucialforonepoint:whileclimatelitigationisoftennovel,itis(re)insurerstounderstandtheirpotentialexposuretorarelyunpredictable.Withtherequisiteknowledge,care,climatelitigationacrossdifferentlinesofbusiness.anddiligence,(re)insurerscanworkwiththeirclientstoreducerisksacrosstheirportfoliosandintherealworld.Thepaperaimstohelpnon-life(re)insurersunderstandthescopeofprivatesectorclimatelitigation,highlightWiththerequisiteknowledge...itspotentialimpactondifferentpolicylines,and(re)insurerscanworkwiththeirpresent(re)insurerswithanoverviewofcoverageclientstoreducerisksacrosstheirconsiderations,riskassessmentmeasures,andareasportfoliosandintherealworld.forfutureinnovation.Wealsoidentifyhowreinsurerscanbeproactiveinaddressingtheglobalclimatetransition.Manycategoriesofclimatelitigationarisefromcompanies’failuretoplanforandprotectagainsttheimpactsofglobalclimatechange.Bybuilding2/Climatelitigationrisk—isthereshelterfromthestorm?IntroductionAsofDecember31,2022,theUNreportedSincetheUnitedNationsEnvironmentProgrammethatexcessof2,180climatelawsuitshadbegansurveyingglobalclimatelitigationin2017,thebeenfiledinmorethan65jurisdictionsvolumeofclimatelawsuitsworldwidehasmorethanacrosstheworld.1doubled.AsofDecember31,2022,theUNreportedthatexcessof2,180climatelawsuitshadbeenfiledinoftenstruggletoestimatetheirexposuretoclimatemorethan65jurisdictionsacrosstheworld.1Whilethelitigationrisk.4In2023,Canada’sfederalinsurancemajorityofclimatelawsuitstargetgovernments,anregulatoremphasizedtheneedforinsurerstoprepareincreasingnumberoflawsuitsarebeingbroughtagainstfor“climate-relatedclaimsunderliabilitypolicies,”andprivatesectorcompaniesunderagrowingvarietyofwarnedthatinsurersandtheirdirectorsandofficerslegaltheories.2Whilemuchofthislitigationisinitsmayfaceliabilityforneglectingclimate-relatedrisks.5earlystages,significantdefensecostsarealreadybeingincurredbydefendantentities.3Thisgrowinglitigationriskhascaughttheattentionofinsuranceregulatorsaroundtheworld.TheBankofEngland’s2021climatestress-testfoundthatinsurersWhatisclimatelitigation?Twoofthesecategoriesmatchtermsusedinclimatechangepolicy:“mitigation”referstoeffortstoslow,halt,Tounderstandthescopeofclimatelitigationorreverseclimatechangeitself,while“adaptation”looksrisk,weneedtofirstansweradeceptivelyateffortstoadapttothephysical,societal,economic,complicatedquestion:whatisclimatelitigation?andlegalchangesassociatedwithclimatechange.7Unsurprisingly,thesepolicygoalsareidentifiableinThenewsisdominatedbyhigh-profilelawsuitsthattheassociatedcategoriesoflitigation.“Mitigationbringbroad,society-changingclaimsaboutgreenhouseclaims”canariseeitherfromadefendant’shistoricGHGgas(GHG)emissionsandseektoassignresponsibilityemissionsorattempttopreventfutureGHGemissions.forclimatechangeitselforholdfossilfuelcompanies“Adaptationclaims,”arisefromadefendant’sfailuretoresponsiblefortheharmsassociatedwiththeirproducts.planfororadapttoclimatechange.“GovernanceandThesecasesarehugelyimportant,butjustasimportantregulatoryclaims,”arisefromadefendant’sbreachofforinsurersarethemyriadofotherdisputesdrivenbyestablishedlegaldutiesrelatedtoclimatechange.climatechange:contractsthrownintoconfusionbyTheselegaldutiescanoriginatefrommanysources.unanticipatedweather,climate-stressedinfrastructurefailingwithcalamitouseffect,directorsandofficerssued“Mitigationclaims”canariseeitherbyshareholdersforignoringcorporateclimaterisks.fromadefendant’shistoricGHGemissionsorattempttopreventForthepurposesofthispaper,“climatelitigation”refersfutureGHGemissions.todisputesthatarisefrom,orarerelatedto:Insomecases,therelevantlawsandlegaldutiesmight1.2.3.havebeenexplicitlydesignedwithclimatechangeinmind—forinstance,anupstreamnaturalgascompanyAparty’sThephysicalLaws,thatventsmethaneintotheatmospheremightbecontributiontoconsequencesregulations,suedforviolatingemissionspermitsinajurisdictionclimatechangeofclimateandlegaldutiesthatregulatesGHGemissions.Othergovernanceandchangerelatedtoregulatorysuitsmightclaimthatadefendantbreachedclimatechange.6agenerallyapplicablelawinawaythatraisesissuesoflaworfactrelatedtothescienceofclimatechange.ForWithinthisdefinition,privatesectorclimatelitigationcanexample,“greenwashing”suitsallegingthatadefendantbesortedintothreebroadcategories:misrepresentedtheclimatebenefitsofaproductoftenariseunderlongstandingconsumerprotectionlaws,1.2.3.someofwhicharenowbeingupdatedtoreflecttheintricaciesofalleged‘greenwashing’suits.MitigationAdaptationGovernanceclaimsclaimsandregulatoryclaims.Climatelitigationrisk—isthereshelterfromthestorm/3Table1:TypesofclimatelitigationDisputetypeDefinitionExamplesMitigationDisputesthatarisefroma•Emissionssuitsallegingthatacompany’sactivitiesorproductsdefendant’scontributioncontributedtoclimatechange.Adaptationtoclimatechangeoraplaintiff’sattempttolimit•FinancedemissionssuitsallegingthatacompanyactivelyGovernance&futureGHGemissions.contributedtoanotherentity’sGHG-emittingactivitiesbyprovidingRegulatorycapitalinvestment,advisoryservices,orothersupport.TheseDisputesthatarisefromaclaimsmaytargetfinancialsectoractors,riskadvisors,orstrategicdefendant’sfailuretoplanconsultants,andmayincludedirectsuitsagainst(re)insurers.fororadapttothephysical,societal,orlegalimpactsof•Suitsagainsttheownersoroperatorsofinfrastructurefollowingclimatechange.climate-drivendisasters(forexample,damcollapsesorwildfires).Disputesarisingfrom•ClaimsagainstdirectorsandofficerswhomakecorporatebreachesoflegaldutiesinvestmentsinGHG-emittinginfrastructurethatfacelegalorthatraiseissuesoflaworeconomicriskfromtheclimatetransition.factrelatedtothescienceofclimatechange.•Professionalliabilityorproductliabilityclaimsagainstarchitects,engineers,ormanufacturerswhofailtoconsiderthechangingclimatewhendesigningbuildingsorproducts.•“Greenwashing”suitsallegingthatacompanymademisstatementsormisrepresentationsabouttheimpactofitsactivitiesonclimatechange.•Securitieslitigationallegingthatacompanyfailedtodisclosematerialclimate-relatedriskstoitsbusiness.•Governmentenforcementactionsallegingthatacompanybreachedclimate-relatedlaws,likeemissionspermittingschemes.4/Climatelitigationrisk—isthereshelterfromthestorm?Affectedproductlines(Re)insurers,likeotherfinancialsectorfirms,faceClimatelitigationhasalreadytriggeredprominentnumerousrisksfromclimatelitigation,includingnotices,coverage,andcoveragedisputesunderCGLoperationandinvestmentrisksthatcouldresultinandenvironmentalliabilitypolicies.Inaddition,theBanklosses,directlawsuitsarisingfromtheirowncorporateofEngland’s2021ClimateBiennialExploratoryScenarioactivities,andregulatoryaction.However,thissection(alsocalledthe“climatestresstest”)identifiedD&Ofocusesonauniquerisktothe(re)insuranceindustry:policiesandprofessionalindemnitypoliciesasbeingtheindustry’sexposuretoclimatelitigationriskarisingparticularlyexposedtoclimatelitigation.9Claimsunderfromcurrentportfoliosofunderwrittenpolicies.otherpolicylines,likeproductliabilityandemployerliability,mayrarelyusethephrase“climatechange,”Whilearapidlyevolvingrisk,climatelitigationisbutmayneverthelessbeimpactedbychangingclimateincreasinglysignificantforanumberofpolicyconditionsandextremeweatherevents.lines,including:70%ofglobalclimatelawsuits,Commercialgeneralliability(“CGL”)8andmostoftheprominentcoverageDirectors&officers(“D&O”)policiesdisputesrelatedtoclimatelitigation,arefiledintheU.S.10EnvironmentalliabilitypoliciesThissectionclassifiesandanalyzespoliciesaccordingtoProfessionalliabilityorprofessionalindemnitypoliciesthestandardsandlanguageprevailinginNorthAmericaninsurancemarkets,andprimarily(butnotexclusively)ProductliabilityciteslitigationfromtheUnitedStates.Thisislargelyapracticalchoice—70%ofglobalclimatelawsuits,andWorker’scompensationoremployer’sliabilitymostoftheprominentcoveragedisputesrelatedtopolicies,amongothers.climatelitigation,arefiledintheU.S.10However,thefactualcircumstancesandtheoriesofharmunderlyingtheseclaimswillberelevanttoabroaderswatheofmarkets,subjecttolocallawsandpolicylanguage.CommercialgeneralliabilityMitigationDefendantsinmitigationlitigationoftenattempttoclaimarighttodefenseandindemnificationAdaptationundergeneralliabilitypolicies.Asmitigationlitigationoftenallegescumulativeharmfromdecadesofemissions,theseclaimscanresultinnotificationsunderhistoricCGLpolicies.(SeeGovernance&page7:TheAlohaPetroleumLitigation).RegulatoryAdaptationlitigationmayresultinclaimsunderCGLpolicieswhenaclient’sallegedfailuretoadapttoclimatechangecausesharmtothirdparties.Forexample,theU.S.ArmyCorpsofEngineershasfacedlawsuitsarisingfromitsoperationofdamsandwatercontrolinfrastructureduringHurricaneHarveyin2017.ThesesuitsallegethattheArmyCorpsfailedtoappropriatelyreviseitswatercontrolplanstoreflectknownfloodrisks,andsubsequentlydestroyedneighboringpropertieswhenitsreservoirsoverflowedduringthehurricane.(SeeFortBendCnty.v.UnitedStatesArmyCorpsofEngineers,59F.4th180,186(5thCir.2023)).Impactnotapparent,butmayemergebasedonpolicylanguageandjurisdictionalcharacteristics.Climatelitigationrisk—isthereshelterfromthestorm/5TheAlohapetroleumlitigationSomeclimatedefendantshavealreadysubmittedclaimsforindemnityinrespectofdefensecostsassociatedwithclimatelitigation,andsomeofthoseclaimshaveledtosignificantcoveragedisputesbetweenpolicyholdersandtheirinsurers.In2020,theCityandCountyofHonolulu1andtheCountyofMaui2broughtclaimsagainstanumberoffossilfuelcompanies.Theseplaintiffsallegethatthecompanieshidtheknownharmfuleffectsoftheproductstheysold,andseekdamagesandotherreliefarisingfromtheirclimate-relatedharms.Oneofthedefendants,AlohaPetroleum,Inc.,broughtacoveragesuitagainstitsinsurer,NationalUnionFireInsuranceCo.ofPittsburgh(“NationalUnion”).Inthecase(AlohaPetroleumv.NationalUnionFireInsuranceCo.ofPittsburgh),AlohaPetroleumclaimsthatitisentitledtodefenseandindemnificationunderfourCommercialGeneralLiabilitypolicies,whichcoverfourdiscreteone-yearperiodsbetween1980and1986.3Followingdiscovery,AlohaPetroleumfiledanAmendedComplaint,inwhichanadditional19insurancepoliciesarelisted,allissuedbetween1980and2009(byeitherNationalUnionoranotherinsurer,AmericanHomeAssuranceCompany(“AmericanHome”)),inrespectofwhichAlohaPetroleumnowseeksindemnity.4TheAmendedComplaintalsocontainsaclaimagainstNationalUnionforitspurportedly“badfaith”denialofAlohaPetroleum’sinitialclaims,whichallegesthatNationalUnion’sinitialcoveragedenialwasbasedsolelyonapollutionexclusionina1985commercialgeneralliabilitypolicy.AlohaPetroleumfurtherclaimsthatNationalUnionnowconcedesthatsomeofthepoliciesinrespectofwhichindemnityissoughtdonotcontainsuchapollutionexclusion,suchthattheinsurer“hasnoreasonablebasisforrefusingand/orfailingtodefendAlohaunder[threeofthepolicies].”5Whilethislawsuitremainsunresolved,itillustratesthetypesofcoveragedisputesthatcanarisefromclimatelitigation.Footnotes:1Complaint,City&CountyofHonoluluv.SunocoLP,Civ.No.20-380(Haw.1stCir.Ct.filedMar.9,2020).2Complaint,CountyofMauiv.SunocoLP,Civ.No.20-380(Haw.2ndCir.Ct.filedOct.12,2020).3SeeComplaint,AlohaPetroleumLtd.v.NationalUnionFireInsuranceCo.ofPittsburgh,Civ.No.22-372(D.Haw.filedAug.10,2022).4SeeFirstAm.Complaint¶¶8–32.,AlohaPetroleumLtd.v.NationalUnionFireInsuranceCo.ofPittsburgh,Civ.No.22-372(D.Haw.filedAug.10,2022).5Id.¶¶91–95.iAsagovernmententity,theArmyCorpsofEngineersissubjecttoasignificantlydifferentsetoflegalclaimsthanprivatecompanies.However,thefactualallegations—theArmyCorps’allegedfailuretoadaptitsoperationstochangingphysicalconditions—illustrateanarchetypicaladaptationclaim.EnvironmentalinsuranceMitigationMitigationclaimsarisefromorallegetheharmfulemissionofGHGs,whicharecolloquially(andoftenlegally)consideredapollutant.However,environmentalpoliciesoftencoveranarrowAdaptationrangeofharms,andsomemodernenvironmentalpoliciesexplicitlyexcludeclaimsrelatedtotheGovernance&emissionofGHGs.11ThequestionofwhetheramitigationclaimiscoveredunderCGLpolicies,Regulatoryenvironmentalpolicies,orneitherwillrequiresignificantanalysisofboththespecificclaimandthelanguageofanyapplicablepolicies.(Seepage11:“ExclusionaryLanguage”and“DefinitionofPollution”).Climatechangeisdrivinganincreaseinsecondaryperilslikehurricanes,wildfires,andfloods.Ifcompaniesfailtoappropriatelyprepareforsuchincreasedrisks,thesedisasterscanresultinsignificantpollution.Followingapollutionevent,third-partylawsuitsandgovernmentenforcementactionsundergeneralenvironmentallawsmayresultinclaimsagainstenvironmentalpolicies.Forexample,in2017floodingrelatedtoHurricaneHarveycausedanexplosionatachemicalfacilityinTexas,resultinginaseriesoflawsuits,regulatoryenforcementactions,andcriminalprosecutions.In2023,thefacility’sownerrevealedthatthecostsassociatedwiththesedisputeshadbeenlargelycoveredbyenvironmentalinsurancepolicies.(Seepage10:TheArkemaChemicalFactoryExplosion).6/Climatelitigationrisk—isthereshelterfromthestorm?DirectorsandofficersinsuranceMitigationThedirectorsandofficersofcompanieswhosebusinessmodelsrelyonGHGemissionsmayfaceaAdaptationvarietyofmitigationclaims.Forexample,in2023ClientEarth(aU.K.nonprofit)filedashareholderderivateactionagainsttheboardofdirectorsofShell,allegingthatthedirectors“breachedtheirGovernance&legaldutiesunderthe[U.K.]CompaniesActbyfailingtoadoptandimplementanenergytransitionRegulatorystrategythatalignswiththeParisAgreement.”12WhileClientEarth’scasewasdismissed,andEnglishcourtshave,todate,“showedreluctance”toaccepttheseclaims,legalcommentatorshavesuggestedthatcaseslikethismayreflectawider,andgrowing,trendinsuitsagainstdirectors.13Thedirectorsandofficersofawidevarietyofcompaniesmayfaceadaptationclaimsallegingthattheyhavefailedtoconsider,orpreparefor,thephysical,legal,economic,andsocietalrisksassociatedwithclimatechange.Forexample,inMcVeighv.RetailEmployeesSuperannuationTrust,anAustralianpensionfundmembersuedtheRetailEmployeesSuperannuationTrust,allegingthatthefundviolatedvariousfiduciarydutiessetforthinAustralianlaw“byfailingtoprovideinformationrelatedtoclimatechangebusinessrisksandanyplanstoaddressthoserisks.”(SeeAmendedConciseStatement,McVeighv.RetailEmployeesSuperannuationTrust,FederalCourtofAustralia,NSD1333/2018,(filedSept.21,2018)(Austl.)).McVeighsettledbeforetrial,followinganumberofgovernanceconcessionsbytheTrustrelatedtoitsclimatechangerisk-assessmentprocedures.14Directorsandofficersmayalsofaceclaimsarisingundergeneralcorporatelawthatostensiblyhavelittletodowitheithercorporateemissionsorclimaterisk.Forexample,inNovember2022shareholdersofEnvivia,acompanythatmanufacturedpurportedlysustainablebiofuelpellets,suedthecompanyandseveraldirectorsfor“misrepresent[ing]theenvironmentalsustainability”ofitsproducts,whichamarketreportissuedshortlybeforethesuithaddescribedas“flagrantlygreenwash[ed].”ThereleaseofthemarketreportcausedthepriceofEnvivia’sstocktofalldramatically.(SeeComplaint,Fagenv.Envivia,Civ.No.22-2844(D.Md.filedNov.3,2022)).Professionalliability/professionalindemnityMitigationImpactnotapparentincurrentclimatelitigation,butmayemergeinindustrieswithsignificantAdaptationcontributionstoGHGemissions.Governance&ProfessionalliabilitypoliciesmaybeexposedtoadaptationclaimsassertingthataninsuredRegulatoryprofessionalfailedtoadequatelyconsidertheimpactsofclimatechange.15Forexample,followingHurricaneHarveyhundredsofhomeownersinaTexashousingdevelopmentsuedtheengineeringfirmCostello,Inc.foritsallegedlyflaweddesignofaleveeprotectingtheneighborhood.ThefounderofCostello,Inc.notedthattheleveesweredesignedtoa100-yearfloodstandardthatHurricaneHarveydemonstratedwasinadequate.16Impactnotapparentincurrentclimatelitigation,butmayemergebasedonpolicylanguageandjurisdictionalcharacteristics.ProductliabilityMitigationMitigationclaimsmayimplicateproductliabilitypolicieswheretheunderlyingclaimallegesadefectcausing,orriskarisingfrom,aproduct’sGHGemissions.Forexample,municipalitiesAdaptationinHawaiiarecurrentlysuinganumberoffossilfuelcompaniesfordamagesassociatedwithGovernance&theirproducts’GHGemissions.Amongotherclaims,thesuitsassert“failuretowarn”claims—Regulatoryatheoryofproductliabilitywhichallegesthataharmresultedfromamanufacturerordistributor’sfailuretowarnpurchasersofthepotentialrisksofusingaproduct.(Seepage7:TheAlohaPetroleumLitigation.)Productliabilitypoliciesmayalsobeimpactedbyclaimsthataproduct’sfailuretoconsidertheimpactofclimatechangerendersitunfitforitspurposeorrecommendeduse.Productsasdiverseassandals,electronicspackaging,andpowersubstationsmaybevulnerabletoincreasedheatandextremeweatherevents.Impactnotapparentincurrentclimatelitigation,butmayemergebasedonpolicylanguageandjurisdictionalcharacteristics.Climatelitigationrisk—isthereshelterfromthestorm/7Worker’scompensation/employer’sliabilityMitigationImpactnotapparentincurrentclimatelitigation,butmayemergeinselectindustrieswithsignificantcontributionstoGHGemissions.AdaptationGovernance&Climatechangeexposesemployeestoincreasingphysicalrisksintheworkplace,likeheatwavesRegulatoryandotherextremeweatherevents.17Employerswhofailtoadequatelyprotecttheirworkforcesagainsttheserisksmayfacelawsuitsfrominjuredworkersandenforcementactionsfromgovernmentsallegingviolationsofworkersafetylaws.18TheArkemachemicalfactoryexplosionArkemaInc.istheownerandoperatorofachemicalfacilityinCrosby,Texas.A2016reportwrittenbyArkema’sinsureridentifiedthattheArkemafacilitywasvulnerabletoflooding,amongotherrisks,becauseinsurancefloodzoneshadshiftedsincethefacilitywasbuilt.Althoughtheinsurancereportidentifiedthefloodrisk,itdidnotmakeanyrecommendationstoArkematoaddressfloodinghazards.FollowingunrelatedchangestotheCrosbyfacility,Arkema’sinsurerindicatedthatitwassatisfiedwiththefacility’sriskprofile.1InAugustof2017,theCrosbychemicalfacilitywasfloodedfollowingheavyrainfallcausedbyHurricaneHarvey.Arkema’sfloodedfacilitylostpoweranditschemicalrefrigerationsystemsfailed,whichinturnledtofires,anexplosion,andunauthorizedtoxicairemissions.2Followingtheexplosion,Arkemaanditsexecutivesweresubjecttoaseriesofprivatelawsuits,regulatoryenforcementactions,andcriminalprosecutions.3ThemajorityoftheseclaimshavebeencoveredbyArkema’senvironmentalinsurancepolicies.4Footnotes:1U.S.ChemicalSafety&HazardInvestigationBoard,OrganicPeroxideDecomposition,Release,andFireatArkemaCrosbyFollowingHurricaneHarveyFlooding81–82(May2018),https://www.csb.gov/arkema-inc-chemical-plant-fire-/.2Complaint,CountyofMauiv.SunocoLP,Civ.No.20-380(Haw.2ndCir.Ct.filedOct.12,2020).3Foranoverviewoftheselawsuits,seeMartinLockman,ModellingClimateLitigationRiskfor(Re)Insurers,SabinCenterforClimateChangeLawAnnex3(July18,2023),https://scholarship.law.columbia.edu/sabin_climate_change/201.4Arkema,2022UniversalRegistrationDocument329(Mar.28,2023).8/Climatelitigationrisk—isthereshelterfromthestorm?ClimatelitigationcoverageconsiderationsKeypolicytermsaffectingcoverageExclusionarylanguageGiventheseriousuncertaintiessurroundingclimateFacedwiththeriskofclimatelitigation,itisimportantforlitigationandthepotentialscaleofclimatedamages,many(re)insurersandtheirclientstounderstandtheextentto(re)insurersmaywanttoentirelyexcludeclimateclaimswhichclimatelitigationmaybecoveredbytheircurrentfromcoverage.Severalorganizationshavedevelopedandhistoricpolicies,andtounderstandthecoverageexclusionarylanguagedesignedtolimit(re)insurerexposureimplicationsofnewlywrittenpolicies.Thissectiontovariouskindsofclimateliabilityrisk.21However,whileaddresseskeypolicytermsaffectingclimatelitigationsampleexclusionsareavailable,the(re)insuranceindustry’scoverage.Itisimportanttonotethatthediscussionofwillingnesstoadoptsuchexclusionswilldependon:policytermsinthissectionisgeneral,andthatthequestionofwhetheraspecificclimatelitigationclaimwillbecovered1.theeaseofidentifyingclimateclaims,underaspecificinsurancepolicyrequiresanuancedand2.theeaseofdistinguishingclimateclaimsfromother,jurisdiction-specificanalysis.Withintheselimitations,however,severaltermshavebeenidentifiedasparticularlycoveredclaims,andimportantforunderstandingclimatelitigationrisk.3.thewillingnessofclientstoacceptpolicieswithGeneraltermsclimatelitigationexclusions,orindeed(re)insurersAnumberofgenerallyapplicablepolicytermsarehighlyappetitetowritethem.relevantinthecontextofclimatelitigation.Forexample,mitigationclaimsrelatedtolong-termGHGemissionsAsapracticalmatter,someclimateclaimswillbemuchoftenallegethatharmwascausedandsufferedovermanyeasiertoexcludefromcoveragethanothers.Mitigationyearsordecades,andpolicyholdersarelikelytoseekclaimsarerelativelyeasytoidentify—althoughtheymayindemnityacrossmultiplepolicyperiods.Ifajurisdictiontakeavarietyofforms,iitheyarisefromadefendant’sallowsclaimsacrossmultiplepolicyperiodstobeappliedinvolvementintheemissionofaspecificsetofGHGtomultipleinsurancepolicies,andtherelevantpoliciespollutants.Adaptationclaims,ontheotherhand,aredonothaveanti-stackingornon-cumulationclauseslikelytobeintertwinedwithotherclaimsthatarenotthatlimitcoverage,long-termmitigationclaimswillobviouslyclimate-related.Ifanewhousingdevelopmentlikelysignificantlyexceedthelimitsofasinglepolicy.19isunderminedbyunanticipatedflooding,forexample,Likewise,theselong-tailclaimsmeanthatpoliciesitmaytakeyearsofcomplexlitigationbeforethepartieswith“claims-made”triggersmaybelessexposedto(andtheirinsurers)determinethatthecollapsewasmitigationclaimsthanpolicieswith“losses-occurring”causedbyafailureofthebuildertoplanforthechangingor“occurrence”triggers.20Defensecostprovisions,climate.Otherclimateclaims,likesomegovernanceandincludingcoveragetriggers,limits,andsub-limits,areregulatoryclaimsagainstdirectorsandofficers,maybealsocrucialtoassessmentsofclimatelitigationcoverage.easytoidentifyasclimate-relatedbuthardtoexcludeClimatelitigationisoftenfact-intensiveandreliantonforcommercialreasons.While(re)insurersmayeasilyexpertevidence,soevenlawsuitsclaimingrelativelyidentifylawsuitsalleginggreenwashing,forexample,minordamagescanresultinsignificantlegalfees.thesesuitsareultimatelyverysimilartoothercorporatemisrepresentationrisksthataregenerallyconsideredinsurable.Topreservebroadcoverageandmeetclientexpectations,D&Ocarriershavehistoricallypreferredtouseriskselectionpracticesovercategoricalexclusions.22Table2:Climateclaims—ExclusionsClaimIsitidentifiable?Isitexcludable?Are(re)insurersexcluding?Yes.MitigationGenerallyeasyRelativelyeasytoexclude,andexclusionmaybetoidentify.commerciallyviablewherepollutionexclusionsExclusionsarenotyetarecommon.common.AdaptationCanbedifficultDifficulttoexclude,andmaybelimitedbyExclusionsarenotyettoidentify.commercialviabilityforpoliciesthatotherwisecommon.coverclaimsrelatedtoriskassessment.Governance&GenerallyeasyMaybelimitedbycommercialviabilityforpoliciesRegulatorytoidentify.thatotherwisecovergovernanceandregulatoryrisk.iiForexample,themitigationlawsuitsunderlyingtheAlohaPetroleumcoveragedisputeallegethattheplaintiffssufferedharmfromGHGemissionsassociatedwiththeproductssoldbythedefendantfossilfuelcompanies.However,severalcoreclaimsintheunderlyingcaseallegethatthedefendantsengagedingreenwashingaroundtheirproducts,andmightbetreatedasgeneral“governanceandregulatory”claimsiftheunderlyingharmfulactivitydidnotspecificallyrelatetothedefendants’contributionstoGHGemissions.(Seepage7:TheAlohaPetroleumLitigation;seealsoComplaint,CountyofMauiv.SunocoLP,Civ.No.20-380(Haw.2ndCir.Ct.filedOct.12,2020)).Climatelitigationrisk—isthereshelterfromthestorm/9Forcompetitivereasons,carriersmaybeunwillingtoDefinitionofPollutantleadtheindustryinapplyingclimatelitigationexclusionsuntilsignificantlossesarisefromclimate-relatedWhileGHGsareconsidered“pollutants”underanumberofclaims.However,ifandwhencarriersbegintosustainlegalframeworks,(re)insurersandclientsmaystruggletomeaningfulclimate-relatedlosses,considerationofthedeterminewhetherGHGsareconsidered“pollutants”forviabilityofexclusionarylanguagewilllikelybecomethepurposeofapplyingpollutionexclusionsornarrowlymorecommonplace,especiallyfor‘atrisk’sectorsdefinedpollutantcoverage.24Thereissignificantuncertaintyandjurisdictions.aroundwhether“pollutionexclusions”inexistingpoliciescoverGHG-relatedclaims,25anddifferentjurisdictionsmayDefinitionof“Occurrence”&fortuityprinciplestakeavarietyofapproachestointerpretingpolicylanguage.EvenifGHGsaredeemedacovered“pollutant”undertheInsurersholdingaportfolioof“occurrence-based”termsofaspecificpolicy,somepoliciesmayonlycoverpoliciesmaybeexposedtomitigationclaimswherepollutant-relatedclaimsarisingfromaccidentalspillsandsuchclaimsincludelossesfordamagesasaresultofcontamination,andmaynotcoverclaimsarisingfromlong-termcorporateGHGemissions.23Insuchcases,GHGsthatwereintentionallyorknowinglyemittedfroma(re)insurersandclientswillhavetocloselyexaminemitigationdefendant’sactivities.boththeunderlyingclimatelitigationclaimsandanyrelevantpoliciestodeterminewhetheraspecificclaimiscovered.Climate-relateddamagethatnaturallyarisesfromtheintentionalactsofadefendant,likeburningorsellingfossilfuels,mayfalloutsideofpolicy“occurrence”definitions(see:Fortuity,“Occurrence,”andSteadfastInsuranceCo.v.AESCorp.below).Equally,fortuityprinciples,whetherexplicitlyincludedinaninsurancepolicyorpresentinajurisdiction’slaw,maymeanthatcoverisnotaffordedtothird-partyclimateclaimsthatweretheprobableconsequenceofadefendant’sownactions.However,whilefortuityprinciplesvarybetweenjurisdictions,fortuityisanaffirmativedefensetocoveragethatisnotoriouslychallengingforinsurerstobringsuccessfully.Ascompaniesbecomeincreasinglyawareofspecificclimate-relatedrisksandassociateddamage,however,adaptation“fortuity”defensesmaybecomemoreviable.Fortuity,“Occurrence,”andSteadfastInsuranceCo.v.AESCorp.InSteadfastInsuranceCo.v.AESCorp.,themostprominentcoveragedisputearisingfromaclimatelitigationcase,aninsurancecompanysoughtadeclaratoryjudgmentthatitwasnotrequiredtodefendorindemnifyitspolicyholder,AESCorp.,againstalawsuitseekingclimatechange-relateddamages.Theallegationsintheunderlyingcase,NativeVillageofKivalinav.ExxonMobilCorp.,claimedthattheplaintiffswereharmedbytheintentionalGHGemissionsfromthedefendant’spowerplants.TheVirginiaSupremeCourtaffirmedarulinginfavoroftheinsurancecompany.ThecourtheldthatharmsarisingfromintentionalGHGemissionsdidnotrepresentan“accident”or“occurrence”underthetermsofthecommercialgeneralliabilitypolicythatAESCorp.hadpurchased,becausetheemissions,andtheresultinginjurytotheKivalinavillagerswereallegedtobethe“naturalorprobableconsequencesofanintentionalact.”1Footnote:1AESCorp.v.SteadfastInsuranceCo.,283Va.609,621(2012);seealsoSteadfastInsuranceCo.v.AESCorp.,ClimateChangeLitigationDatabase(n.d.),http://climatecasechart.com/case/steadfast-insurance-co-v-the-aes-corporation/.10/Climatelitigationrisk—isthereshelterfromthestorm?Table3:SummaryofpolicytermsandprinciplesaffectingclimatelitigationcoverageRiskmitigantMitigationclaimsAdaptationclaimsRegulatory&GovernanceclaimsGeneralterms(policyHighlyrelevanttocoverage.Highlyrelevanttocoverage.Highlyrelevanttoduration,policyHighlyrelevanttocoverage.coverage.triggers,anti-stacking,Someexclusionsmaybedefensecostlimits)possible.Difficulttoapplyclimate-specificexclusions.ClimateexclusionarylanguageDefinitionofHighlyrelevanttocoverage.Limitedrelevancetocoverage.Limitedrelevanceto“Occurrence”coverage.FortuityprinciplesHighlyrelevanttoclaimMaybecomeincreasinglyLimitedrelevancetoassessment,butcouldrelevantasclimateadaptationcoverage.Definitionoftriggerdifficultcoveragebecomesmorecommon.“Pollutant”disputes.LimitedrelevancetoLimitedrelevancetocoverage.coverage.Highlyrelevanttocoverage.Table4:SummaryofriskassessmentpracticesaffectingclimatelitigationexposureRiskassessmentMitigationclaimsAdaptationclaimsRegulatory&RiskselectionGovernanceclaimsIncreasinglyviable,becauseViable,becausecompaniesMarketselectioninformationaboutclienthavesignificantlydifferentViable,becausecompaniesGHGemissionsisprocessesforidentifyingandhavesignificantlydifferentClientincreasinglyavailable.respondingtoclimaterisks.processesforidentifyingengagementandrespondingtoViable,becauseatpresent,Bespokeassessmentclimaterisks.mitigationclaimstargetrequiredduetothebroadscoperelativelyfewindustries.ofpotentialclaimsBespokeassessmentanddefendants.requiredduetothebroadEngagementaroundGHGViable,sinceclientsarescopeofpotentialclaimsreductionsandnetzeroplanningincentivized(andmayanddefendants.viableinmanyindustries,butincreasinglybemandated)maybedifficultforthemosttoassessclimatethreatstoViable,sinceclientsareprominenttargetsofmitigationtheirbusinesses.highlyincentivizedtolawsuits(e.g.,fossilfuelidentifyregulatoryriskstocompanies)thathavebuilttheirbusiness.theirbusinessmodelsaroundGHGemissions.Climatelitigationrisk—isthereshelterfromthestorm/11RiskassessmentandriskselectionWhileitiscrucialfor(re)insurersandtheirclientstobyidentifyingtheriskiestjurisdictions,industries,andunderstandhowclimatelitigationisaddressedunderclients.However,thewiderangeofclimatelitigationcurrentandhistoricpolicies,(re)insurersalsohaverisksmeansthatinsurersmayhavetoadoptavarietytheopportunitytoadoptsophisticatedandproactiveofriskselectionprocesses.responsestowardsriskinnewlywrittenpolicies.Asinitialsteps,(re)insurerscanfocusonriskawareness,Insomeareas,riskidentificationmayrelyonrelativelyfewandensurethatknowledgeandunderstandingofvariables.Theexposureofasectortomitigationlitigation,climatelitigationriskfiltersacrosstheirorganizationsforexample,willbecloselytiedtoitsrelationshipto(andparticularlytheirunderwritingteams).ArmedwithGHG-emittingactivities.iiiOtherkindsofclimatelitigation,theindustry’sgrowingunderstandingofclimatelitigationontheotherhand,canbehighlynuancedandtiedtorisk,(re)insurerscanthenbegintoadoptbespokeclient-specificfactors.Companieseachhaveuniqueriskselectionpractices.Thesepracticesmayincludeadaptationneedsbasedonthedetailsoftheirbusinessescreatingportfolio-wideriskmodels,client-specificriskandthephysicalcharacteristicsoftheiroperations.selectionpractices,corporateunderwritingguidelines,Similarly,mostcompanieswillhaveuniquegovernanceandclimatelitigationprotocols.andcomplianceneeds,basedontheregulationsthattheyaresubjecttoandtheclimate-relatedrisksthattheyface.PortfolioriskassessmentUnderstandingthedifferentriskprofilesofpolicyholderswillhelpinsurersassessthelikelyfrequencyandseverity(Re)insurersshouldcarryoutassessmentsoftheirofclimateclaimsthattheymayface.portfolios’exposuretoclimatelitigation.Thisisnotjustgoodpractice—insuranceregulatorsareincreasingly(Re)insurersshouldcarryoutassessmentsoftheirrequiring(re)insurerstoquantifytheirexposuretoportfolios’exposuretoclimatelitigation.Thisisclimatelitigationrisk.26Thisassessmentmustincludeanotjustgoodpractice—insuranceregulatorssignificantretrospectiveanalysis,becauseaspreviouslyareincreasinglyrequiring(re)insurerstoquantifydiscussedmany(re)insurersfacelegacyriskfromtheirexposuretoclimatelitigationrisk.long-tailclaimslikemitigationlawsuits.Fortunately,thegrowthinclimatelitigation,(andparticularlyofUnderwritingguidelinesandclimateclimatelitigationthatislikelytoresultinnotificationstolitigationprotocolsinsurers)hasbeenaccompaniedbyagrowingnumberofquantitativeandqualitativetoolstomodelclimateWhenarmedwiththerequisiteknowledge,underwriterslitigationrisk.27Giventhecomplexanddynamicnatureareabletoincludeclimateriskexposureintheirofclimatechange,andthecorrespondinglycomplexunderwritingguidelinesandframeworks,contentlitigationlandscape,suchmodelscannotbestatic;anyvarying,forexample,byreferencetolineofbusiness,modelbasedonapre-defineduniverseoflitigationriskssectorandjurisdiction.Understandingthedifferentwouldsoonbecomeobsolete.28Theoutputofsuchriskprofilesofpolicyholderswillassistunderwritersinmodellingexerciseswillbeofwide-useto(re)insurers,assessingthelikelyfrequencyandseverityofclimatefeedingintotheirunderwriting,claims,capital,pricing,litigationclaims,andunderwritersmayneedtocollectreservingandexposuremanagement.someclient-specificdataaboutactivities,climatepolicies,andgovernanceprocesses.29WhilenoentityRiskselectionpracticescancompletelycontrolwhetheritwillfaceathird-partylawsuit,engagementandtransparencyaroundInsurersthatdevelopexpertiseinassessingclimateclimatelitigationriskwillhelpbothunderwritersandlitigationriskcanbegintoimplementclimatepolicyholdersassesstheirexposuretoclimatelitigation.underwritingriskselectionpracticesfornewpolicies.Suchpracticescanraiseclientawarenessabouttheirexposuretoclimatelitigationrisk,andmayallow(re)insurerstopricenewclimatelitigationcoverageiii(Re)insurersshouldbewaryofrelyingentirelyonreportedemissions,liketheGHGProtocol’s“Scope1,2,and3”measurements,becausemitigationdefendantsoftencontributetoGHGemissionsthroughavarietyofchannels.Sometargetsofmitigationlitigation,likefossilfuelcompanies,energyutilities,andchemicalmanufacturersmayemitGHGsdirectlyorthroughtheirproducts.However,somemitigationlitigationhasbeentargetedtowardscompaniesthatadviseorfinanceGHG-emittingindustriesbutdonotthemselvescreatesignificantGHGemissions.See,e.g.,Complaint¶200,CountyofMultnomahv.ExxonMobilCorp.etal.,Civ.No.22-25164,Or.Cir.Ct.(filedJune22,2023)(suingtheconsultingfirmMcKinsey,amongothercompanies,for“coordinat[ing]andparticipat[ing]inadeliberatemisinformationcampaign”aroundclimatechangeatthebehestofGHG-emittingcompanies).12/Climatelitigationrisk—isthereshelterfromthestorm?InnovationinclimatelitigationcoverageTheevolvinglandscapeofclimatelitigationriskofferswhilstalsotakingstepstominimizetherisksthattheirmanyopportunitiesfortheinsuranceindustrytoactivitiesposetosociety.Engineeringfirmsthatadaptcreateinnovativecoverageproductsandriskcontroltheirpracticestothechangingclimate,forexample,maysolutions.Ascorporationsawakentotheincreasingsignificantlyreducetheirriskofadaptationlitigation.riskofclimatelitigation,insurersarealreadyfacingaSimilarly,publiclytradedcompaniesthatapplyindustrygrowingdemandforclimaterelatedriskmanagementbestpracticestoevaluatetheirexposuretoclimateservices.30Inresponse,insurersandbrokerscandevelopchangemayreducetheexposureoftheirdirectorsnewclimatebasedfinancialproducts,advisoryservices,andofficerstogovernanceandregulatorylitigation.analytics,andriskcontrolmechanismstomeettheirEngagementisnotapanacea—someclimatelitigationclients’needs.risks,likehistoricGHGemissions,cannoteasilybereducedthroughclientengagement.However,formanyProductdevelopmentcategoriesofclimatelitigation,clientengagementaroundlosscontrolwillreduceriskbymakingtheworldClimatelitigationcreatesanumberofnewareasofmoreresilienttotheimpactsofclimatechange.uncertainty.Wherepolicyholdersarelookingtomitigateoroffsettheirownrisks,insurershavetheopportunityTheexpertiseandanalyticaltoprovidenewrisktransfersolutions.Forexample,intechniquesthatwillallowcarriersresponsetolegaluncertaintyincarbonoffsetmarkets,toidentifyandquantifyclimateanumberofinsurershavebeguntodevelopproductslitigationriskwillalsobeincrediblythatinsurepre-vettedemissionsoffsets“againstriskslikevaluabletocompaniesseekingtoinvalidation,third-partynegligenceandfraud.”31Similarly,understandtheirownexposuretotheWorldBank’sMultilateralInvestmentGuaranteeclimatelitigation.Agencyhasbeguntoofferproject-specificpoliticalriskinsurancetoprotectinvestmentin“carbonoffsetConclusionprojectsindevelopingcountries.”32Giventheuncertaintysurroundingclimatelitigation,andtheinsuranceClimatelitigationisacomplexandrapidlygrowingindustry’straditionalrelianceuponpastperformancetothreattotheinsuranceindustry,anditiscrucialtodetermineinsurabilityandcostsforrisktransfer,carriersunderstandthepotentialthreatthatpolicyholdersmayinitiallybereluctanttoacceptlargeswathesoffacefrommitigationlitigation,adaptationlitigationclimatelitigationrisk.Aswithallareasofemergingrisk,andgovernanceandregulatorylitigation.Eachspecialistunderwriting,andmarketcollaborationmaycategoryofclimatelitigationhasdifferentbeneededtomeetindustrycapacitydemand.characteristics,targetsdifferentdefendants,andimpactsinsuranceproductsinverydifferentRiskidentificationandclientengagementways.Toaddressallthree,(re)insurerswillneedtoadoptriskassessmenttools,guidelines,andControllingclimatelitigationriskwillalsorequireprotocolsthataretailoredtothejurisdictions,significantinnovationfromtheinsuranceindustry.policylines,andsectorswheretheywritebusiness.(Re)insurersmustbuildnewandinnovativeriskmodelsClimatelitigationisnotrandom.(Re)insurersanddevelopclimateriskselectionpracticestoidentifywhounderstandthescopeandimpactofclimatelegacyrisksembeddedintheirexistingportfoliosandlitigationwillbewell-positionedtonotonlylimitpriceriskinnewpolicies.Theexpertiseandanalyticaltheirownhistoricliabilitiesbutunderstandnewrisktechniquesthatwillallowcarrierstoidentifyandquantifyexposures,buildnewcoveragelines,risktransferclimatelitigationriskwillalsobeincrediblyvaluabletoproducts,andservices.Indoingso,(re)insurerscancompaniesseekingtounderstandtheirownexposurehelptheirclientsplanforandadapttoforeseeabletoclimatelitigation.Riskassessmenttoolsdesignedclimaterisks,whileprovidingrisktransferproductstoevaluateaprospectiveclient’sinsurabilitycanalsotohelpprotectthemagainstunforeseeableones.helpinsurersengagewiththeirclientstoidentifyopportunitiesforlosscontrol.Climatelitigationlosscontrolmayhavesignificantbenefitsforinsurers,clients,andthebroaderworld,becausemuchofclimatelitigationisdownstreamofreal-worldharm.Manycompanieswillbeabletoreducetheirclimatelitigationriskbyadoptingpractices,policies,andsystemsthatcomplywithrelevantlaws,Climatelitigationrisk—isthereshelterfromthestorm/13References16https://www.houstonpublicmedia.org/articles/news/2018/04/05/277534/homeowners-sue-costello-engineering-1U.N.EnvironmentProgramme,GlobalClimateLitigationReport:firm-over-harvey-flood-damage/.2023StatusReview13(July27,2023),https://www.unep.org/resources/report/global-climate-litigation-report-2023-status-review17https://www.undp.org/sites/g/files/zskgke326/files/publications/[hereinafterU.N.2023ClimateLitigationReview].Climate%20and%20Labour%20Issue%20Paper_28%20April%202016_v1_lowres.pdf2Seeid.at50–60.18See,e.g.,RachelFrazin,TexasHeatWaveInvigoratesCallsfor3CamillaHodgson&IanSmith,ClimateLitigationThreatenstoWorkerHeatProtections,TheHill(June29,2023),https://thehill.PushUpCompanies’InsuranceCosts,FinancialTimes(Aug.28,com/policy/energy-environment/4072477-texas-heat-wave-worker-2022),https://www.ft.com/content/1115a034-3fa0-4814-9a87-protections/42bb56128352[hereinafterHodgson&Smith].19ClimateChangeandInsuranceat192–93.4BankofEngland,Resultsofthe2021ClimateBiennialExploratoryScenario(CBES),BoxC:ClimateLitigationRisk(May24,2022)20MarkRothwell,MartinEarle,ChoongHernOoi,JamesOrr,Shradahttps://www.bankofengland.co.uk/stress-testing/2022/results-of-Shroff&JoianhuaSiew,PracticalGuidetoClimateChangeforthe-2021-climate-biennial-exploratory-scenario[hereinafter2021GeneralInsurancePractitioners16(2019),https://www.actuaries.CBESResults].org.uk/system/files/field/document/Practical%20Guide%20to%20Climate%20Change%20for%20GI%20Practitioners_1.pdf5OSFIGuidelineB-15—ClimateRiskManagement,OfficeoftheSuperintendentofFinancialInstitutionsCanada(Mar.2023),https://21SeeLMAModelClimateChangeExclusion,Lloyd’sMarketwww.osfi-bsif.gc.ca/Eng/Docs/b15-dft.pdf.Association(Nov.10,2021),https://www.lmalloyds.com/LMA/News/LMA_bulletins/LMA_Bulletins/LMA21-041-DP.aspx(addressing6SeeMinterEllison,TheCarbonBoomerang—LitigationRiskexclusionarylanguagearoundmitigationclaims);ExclusionsfromasaDriverandConsequenceoftheEnergyTransition3(2017),InsuranceCoverageforClimateHarms,TheChanceryLaneProjecthttps://2degrees-investing.org/wp-content/uploads/2017/09/(n.d.),https://chancerylaneproject.org/climate-clauses/exclusions-Carbon-boomerang.pdf;seealsoMarkRothwell,MartinEarle,from-insurance-coverage-for-climate-harms/(addressingabroadChoongHernOoi,JamesOrr,ShradhaShroff&JianhuaSiew,rangeofclimatelitigationclaims).PracticalGuidetoClimateChangeforGeneralInsurancePractitioners16(2019),https://www.actuaries.org.uk/system/22SeeMartinLockman,ModellingClimateLitigationRiskfor(Re)files/field/document/Practical%20Guide%20to%20Climate%20Insurers,SabinCenterforClimateChangeLaw40(July18,2023),Change%20for%20GI%20Practitioners_1.pdf[hereinafterPracticalhttps://scholarship.law.columbia.edu/sabin_climate_change/201.GuidetoClimateChangeforGeneralInsurancePractitioners].[hereinafterModellingClimateLitigationRisk]7SeeRespondingtoClimateChange:MitigationandAdaptation,23PracticalGuidetoClimateChangeforGeneralInsuranceNASA(n.d.),https://climate.nasa.gov/solutions/adaptation-Practitionersat16.mitigation/.24ClimateChangeandInsurance164–79.8ChristinaM.Carroll,J.RandolphEvans,LindeneE.Patton,&JoanneL.Zimolzak,ClimateChangeandInsurance141(2012)[hereinafter25Foradiscussionofthisissue,andanoverviewofrecentU.S.casesClimateChangeandInsurance].interpretingthecommonlyused“AbsolutePollutionExclusion,”seeAmyHeadrick,ClimateChangeLitigationandInsuranceCoverage,9See,e.g.,2021CBESResults,BoxC:ClimateLitigationRiskTysonMendes(June12,2023),https://www.tysonmendes.com/(highlighting“ProfessionalIndemnity&Directors’&Officersclimate-change-litigation-and-insurance-coverage/.insurancepolicies”asparticularlyvulnerabletoclimatelitigationrisk).26See,e.g.,OSFIGuidelineB-15—ClimateRiskManagement,CanadianOfficeoftheSuperintendentofFinancialInstitutions10SeeU.N.2023ClimateLitigationReviewat18.(Mar.2023),https://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/b15-dft.aspx11See,e.g.,LMAModelClimateChangeExclusion,LLOYD’SMARKETASSOCIATION(Nov.10,2021),https://www.lmalloyds.com/LMA/27SeegenerallyModellingClimateLitigationRisk.News/LMA_bulletins/LMA_Bulletins/LMA21-041-DP.aspx28SeeModellingClimateLitigationRiskat60–61.12VictoriaBarnes,DerivativeActionCommencedinUKAgainstShell’sDirectorsforMismanagingClimateRisk,BurgesSalmon(Mar.29SeeHodgson&Smith,supranote3(discussingtheincreasein9,2023),https://www.burges-salmon.com/news-and-insight/legal-underwritingquestionsdesignedtoassessclimatelitigationrisk).updates/environment/derivative-action-commenced-in-uk-against-shells-directors-for-mismanaging-climate-risk.30LindaHedqvist,KarelineDaguer,KatherineLampen,JoeyGalloway,DianneMouradian,AssessingClimateLitigationRiskfor13GregoryBarden,SarahBatley,MichelleBradfield,AidanLawes,&Insurers,Deloitte(Mar.13,2023),https://emearegulatorystrategy.AlexMacpherson,HighCourtDismissesClientEarth’sApplicationdeloitte.com/post/102ia9c/assessing-climate-litigation-risk-for-toInitiateProceedingsAgainstShell’sDirectors,JDSupra(Aug.17,insurers.2023),https://www.jdsupra.com/legalnews/high-court-dismisses-clientearth-s-5541083/.31ModellingClimateLitigationRiskat28.14SeePressRelease,REST,StatementfromRESTonSettlement32SherylTianTongLee,EwaKrukowska,&IsabelJoyKua,CarbonofMcVeighLitigation(Nov.2,2020)(availableathttps://Offsets:WorldBanktoOfferInsuranceAgainstPoliticalRisk,climatecasechart.com/non-us-case/mcveigh-v-retail-employees-Bloomberg(June26,2023),https://news.bloomberglaw.com/daily-superannuation-trust/labor-report/world-bank-to-offer-political-risk-insurance-to-carbon-investors15IAIS,ApplicationPaperontheSupervisionofClimate-relatedRisksintheInsuranceSector14(May2021),https://www.iaisweb.org/uploads/2022/01/210525-Application-Paper-on-the-Supervision-of-Climate-related-Risks-in-the-Insurance-Sector.pdf14/Climatelitigationrisk—isthereshelterfromthestorm?AboutWTWAtWTW(NASDAQ:WTW),weprovidedata-driven,insight-ledsolutionsintheareasofpeople,riskandcapital.Leveragingtheglobalviewandlocalexpertiseofourcolleaguesserving140countriesandmarkets,wehelpyousharpenyourstrategy,enhanceorganisationalresilience,motivateyourworkforceandmaximiseperformance.Workingshouldertoshoulderwithyou,weuncoveropportunitiesforsustainablesuccess—andprovideperspectivethatmovesyou.Learnmoreatwtwco.com.wtwco.com/social-mediaCopyright©2023WTW.Allrightsreserved.WTW-122300/09/2023wtwco.com
VIP
