Subcommittees & Task Forces

Task Force on Global Warming Liabilities & Insurance

“The Big Picture on Insurance and Climate Change”

Like the famous frog in the slowly heating pan of water, we all are beginning to feel the heat of global warming. With the assistance of our Insurance Coverage Litigation Committee’s website chairs and ABA web support, the Emerging Issues Subcommittee invites you to participate in a shared learning experience surrounding this fundamentally important issue. What are the real risks and potential liabilities? How will insurance respond to them? Is this going to be a disaster for corporate America? For the insurance industry? Will coverage lawyers make hay while the sun shines? Will global warming be another Y2K?

We have created a flow chart called The Big Picture on Insurance and Climate Change [PPT]. The chart uses a "decision tree"-type framework to lay out six of major categories of anticipated consequences of climate change. We have added to the chart some initial insurance issues that these consequences raise.

Even in its current rudimentary state, this chart illustrates that global warming is different from many "emerging risks" because it manifests its consequences in so many different ways. Many of these consequences are not new, they are just more extreme. Traditional insurance has dealt with these risks (or chosen not to, e.g., flood exclusions) for decades and centuries. Now, the insurance industry must address risk in this area through a variety of potential mechanisms, including underwriting decisions, potential new or modified exclusions, actuarial research, and even new products. Because the challenges of global warming are so daunting, they invite some serious group thought on the part of our ICLC members.

We, in turn, invite your help in fleshing out this chart, both as to the potential consequences (including both liability and property damage) and insurance issues raised by them. To more easily read the Big Picture chart [PPT], print it out. Soon, we will post the chart in Powerpoint modules for each major set of consequences. We encourage you to pick a module, download it, and annotate it with links to decisions, publicly available articles and material, your own commentary, and other material (for which a fair use may be made) that you consider to be of interest as to either the consequences or their related insurance issues. Send your comments and material to the indicated “host” of that module, who will forward it on to the ICLC web chairs for posting to the site. The hosts are shown on the “Big Picture” and as follows:

More Megastorms: Sallie B. Kraus

Melting Ice: David Godwin

Shifting Weather Patterns: Susan Hogan

Human Health Effects: Karen Painter Randall

Responses and Remedies: Walter Andrews

Disclosure: David Brenner

As we receive postings, we will break out the modules for expansion. We look forward to your thoughts and ideas. Of course, we reserve the right to not add postings or to perform minor edits as necessary to conform to the site modality. We will also be accumluating links regarding significant global warming articles and sites, which we will post below. But mainly, we await your thoughts on this huge emerging issue.

Global Warming Sites and Articles:

• »  Insurers Already Feel The Heat
  Steve Jordan, Omaha World-Herald (March 29, 2007)
• » Top Scientists Warn Of Water Shortages and Disease Linked to Global Warming
  Associated Press, N.Y. Times, (March 12, 2007) (registration req'd)
• » U.S. Insurers Seen as Lagging on Global Warming
  Lilla Zuill and Ed Leefeldt, Reuters (March 12, 2007)