Slide 1: EMEA Contracts Expert Circle 2023: Shaping Contracts for a Resilient Future
EMEA Contracts Expert Circle 2023 Shaping Contracts for a Resilient Future 1
Slide 2: Climate change litigation - [Re]thinking our approach based on the latest developments
EMEA Contracts Expert Circle 2023 Shaping Contracts for a Resilient Future Climate change litigation - [Re]thinking our approach based on the latest developments Lisa Simon, JD, CPCU, RPLU, ARe, Swiss Re 2
Slide 3: Table of Contents
Table of Contents 01 02 03 Climate change Coverage How insurers litigation issues may respond Lisa Simon | EMEA Contracts Expert Circle | 23-24 May 2023 3
Slide 4: What constitutes climate change litigation?
What constitutes climate change litigation? “We consider climate change litigation to include cases before judicial and quasi- judicial bodies that involve material issues of climate change science, policy, or law.” (Grantham Research Institute definition) 4
Slide 5: How many cases are there?
How many cases are there? • As of May 31, 2022, 2,002 cases had been identified • Majority have been filed in the US • Other popular jurisdictions include Australia, the EU and the UK • Starting to see more cases in the Global South (Latin America and the Caribbean, Asia Pacific, Africa) • Source: G
Slide 6: Who is being sued?
Who is being sued? Large GHG emitters – traditionally oil and gas companies, now seeing other industries targeted such as cement, energy, food and transportation Banks, investment firms, pension funds, insurers - who finance or invest in the above Lisa Simon | EMEA Contracts Expert Circle | 23-24 Ma
Slide 7: What are defendants being sued for?
What are defendants being sued for? Contributing to Violation of Concealment/ Mismanage- climate rights to safe Deception ment change environment Providing Failure to financial Climate Adapt support to washing emitters [Presenter] Lisa Simon | EMEA Contracts Expert Circle | 23-24 May 2023 7
Slide 8: Outlook
Outlook • New reporting requirements will lead to an increase in litigation • Wave of carbon offset litigation may be coming • Likely increase in claims against professionals such as auditors, lawyers, accountants, insurance brokers • Environmental justice movement may impact approvals of large GHG
Slide 9: Are climate change claims covered by insurance?
Are climate change claims covered by insurance? Lisa Simon | EMEA Contracts Expert Circle | 23-24 May 2023 9
Slide 10: CGL Coverage Issues
CGL Coverage Issues • Was there an occurrence? • How many occurrences were there? • Was this a known loss? Was injury expected or intended? • Was there bodily injury or property damage? • What is the trigger of coverage? • How should damages be allocated? • Does the pollution exclusion preclude cove
Slide 11: CGL Coverage Litigation
CGL Coverage Litigation Everest Premier AES v Steadfast Aloha Petroleum Ltd. v. National Insurance Co. v. → decided in favor Union Fire Gulf Oil Ltd. of insurer Insurance Co. Partnership → pending → dismissed Lisa Simon | EMEA Contracts Expert Circle | 23-24 May 2023 11
Slide 12: The Bank of England's Climate Biennial Exploratory Scenario exercise
The Bank of England’s Climate Biennial Exploratory Scenario exercise D&O policies were the type of insurance most likely to be exposed and to respond to climate litigation, in particular to greenwashing claims and claims based on breach of fiduciary duties The claim is not going to be that a company
Slide 13: D&O Coverage Issues
D&O Coverage Issues • Conduct exclusion – coverage excluded for intentional, willful, deliberate misconduct • Pollution exclusion • BI exclusion • Relief sought does not constitute loss under policy 13
Slide 14: Insurer responses to climate change
Insurer responses to climate change
Slide 15: Try to avoid underwriting entities who might face exposure
Try to avoid underwriting entities who might face exposure In October of 2022 the alliance Insure Our Future said last year that 62% of reinsurance companies have plans to stop covering coal projects, while 38% are now excluding some oil and natural gas projects. Lisa Simon | EMEA Contracts Expert C
Slide 16: Exclude climate change claims
Exclude climate change claims LMA5570 – Climate Change Exclusion Notwithstanding any other provision in this Policy or any endorsement hereto, this Policy excludes any loss, liability, cost or expense arising out of any allegation or claim that the (Re)Insured caused or contributed to Climate Change
Slide 17: Chancery Lane Project Clauses
Chancery Lane Project Clauses The Chancery Lane Project (TCLP) is a collaborative initiative of international legal and industry professionals who work together to create new, practical contractual clauses ready to incorporate into law firm precedents and commercial agreements to deliver climate sol
Slide 18: Provide incentives for insureds to minimize exposure
Provide incentives for insureds to minimize exposure Archie's Clause: [The/ the] Policyholder may avail itself of a pro-rata return of premium of [10%], provided that during the relevant Policy Period: a. the Policyholder has publicly reported and accurately disclosed to the Insurer all climate-rela
Slide 19: Cover it with conditions
Cover it with conditions Connor's Clause: “It is a condition precedent to any liability of the Insurer under Section ● of this Policy, that the Insured has in place a Net Zero Transition Plan.” Lisa Simon | EMEA Contracts Expert Circle | 23-24 May 2023 19
Slide 20: Provide affirmative coverage
Provide affirmative coverage Seb & Abby’s clause: [Subject to the terms and conditions of this policy of insurance] The Insurer will indemnify the Insured against legal liability to pay compensation and claimants’ costs and expenses in respect of Climate-related Injury or Climate-related Damage occu
Slide 21: Insurers might want to consider the following
Insurers might want to consider the following: • Be informed • Be proactive • Know the risk as relevant to your portfolio • Know what your insureds are doing to manage climate risks and educate them as to best practices
Slide 22: Any questions?
Any questions? LisaLisa Simon Simon| | EMEA EMEA Contracts Contracts Expert Expert Circle Circle | 23-24 | 23-24 May May 2023 2023 22
Slide 23: Thank you!
Thank you! Contact us Follow us Lisa Simon Claims Expert lisa_simon@swissre.com 914 828 8021 23
Slide 24: Lisa Simon | EMEA Contracts Expert Circle | 23-24 May 2023
Lisa Simon | EMEA Contracts Expert Circle | 23-24 May 2023 24
Slide 25: Legal notice
Legal notice ©2023 Swiss Re. All rights reserved. You may use this presentation for private or internal purposes but note that any copyright or other proprietary notices must not be removed. You are not permitted to create any modifications or derivative works of this presentation, or to use it for