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The changing face of environmental insurance
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Environmental insurance was historically considered a niche add-on to organizational coverages – something reserved for heavy industry or high-risk operators. Today, however, thanks to changing regulations and media scrutiny, that perception has shifted dramatically.
In 2025, the US environmental insurance market exceeded $3 billion in annual premiums, and it’s not showing any signs of slowing down. Across sectors, organizations are rethinking how they manage environmental exposure, with insurance quickly moving from a “nice to have” to a strategic necessity. At the centre of this shift is a combination of heightened scrutiny, regulatory pressure, and financial requirements, all of which are fundamentally reshaping risk.
In a recent interview with Insurance Business, Jeffery Duca, president of environmental at Intact Insurance Specialty Solutions, explained that this evolution has been both rapid and unavoidable.
Intact Insurance Specialty Solutions offers a broad range of specialty insurance products through independent agencies, regional and national brokers, wholesalers, and managing general agencies. Each business customer group or industry segment is managed by experienced specialty insurance professionals focused on providing specialized products and tailored coverages and services. Targeted solutions include group accident and health, commercial and contract surety, entertainment, environmental, excess property, financial institutions, financial services, inland marine, management liability, ocean marine, renewable energy, technology, trade credit, and tuition refund. Intact Insurance Specialty Solutions represents the US segment of Intact Financial Corporation (TSX: IFC) Global Specialty Lines business and is the marketing brand for the insurance company subsidiaries of Intact Insurance Group USA LLC.
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“Environmental coverage has moved from a benefit to a requirement. And a lot of that has to do with visibility into business operations”
Jeffery Duca,
Intact Insurance Specialty Solutions
Published April 20, 2026
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“At the end of the day, it comes down to a partnership. We don’t want to be a commodity. What we sell is a promise to pay”
Jeffery Duca,
Intact Insurance Specialty Solutions
From benefit to requirement “Environmental coverage has moved from a benefit to a requirement,” he told IB. “And a lot of that has to do with visibility into business operations – that’s where reputational risk comes in, because there’s just so much more of a spotlight on it today.”
That spotlight is coming from multiple directions at once – including a slew of Hollywood movies detailing the dangers of pollution exposure. Regulators are tightening oversight, stakeholders are demanding transparency, and the speed of information means incidents can no longer be pushed under the rug.
“Regulations have changed,” added Duca. “That’s created more of a need to have it. There’s also financial requirement from banks that simply wasn’t there 20 years ago. [Back then], all you needed was to buy property insurance to get a loan. Now you have to buy property insurance, environmental insurance, and a myriad of other coverages in order to satisfy the loan agreement.”
This change in regulations reflects a larger market shift – because while environmental risk has traditionally been associated with heavy industry, that perception is increasingly outdated. Today, demand for environmental coverage is expanding across sectors, with real estate leading the way. Here, contamination risks are increasingly being discovered after transactions, creating significant liabilities for property owners and lenders alike.
“In the past, there have been incidents where someone has bought a property, and they find out after the fact that the property is contaminated – so they can’t redevelop it. They’re spending all of their money and usually going
bankrupt trying to clean the property – then the mortgage defaults and they have a big mess on their hands.”
Beyond real estate, industries with inherent environmental exposure, particularly those dealing with chemicals or potentially hazardous materials, are also seeing increased demand.
“This is especially relevant when it’s chemical in nature,” said Duca. “Perhaps they’re dealing with something that might be considered toxic or harmful to the environment.”
What’s notable, however, is how far this has spread beyond traditional high-risk sectors. Even light industry is now under scrutiny because, as Duca explained, there are more requirements being laid out every year. And while the nature of the specific toxicity may not have changed, people’s perceptions of it certainly have.
Duca told IB that the growing media spotlight on what organizations are doing with their waste products, what’s coming out of their chimneys or flowing into the fields next to their factories, has led to more public scrutiny. The result is a growing feedback loop between public scrutiny, coverage, and, ultimately, regulatory enforcement.
“We see it in the news all the time,” added Duca. “And I think that’s really created an opportunity for the environmental insurance industry to grow.”
Regulation, reputation, and real-time risk Regulation remains a central pillar of this shift, but it is no longer acting alone. Instead, it is working in tandem with reputational risk, which has become significantly more immediate and severe.
“There’s definitely stricter federal enforcement,” noted Duca. “But then it’s also there at the local level – even in individual towns. [Regarding] the state and federal [aspects], coverage is a requirement. But on that local level, it’s about reputational risk – and that can be very damaging.
“[Historically] with the media, news would take a while to break to the public. Now, it’s instantaneous. If someone takes a picture of something coming out of a facility, or leaking, or someone pouring waste out of the back door, it can be shared immediately. That reputational risk has been a big trigger – from state to federal and even worldwide, oversight of it has changed tremendously. And it’s changed in a good way to help protect the environment.”
General liability: an absolute policy exclusion Despite these risks, many organizations still assume their general liability policies will provide adequate protection. In reality, those policies often fall significantly short.
“Around 25 years ago, the general liability policy added an absolute pollution exclusion,” explained Duca. “When that happened, it created a big environmental market because there was now a need – this really was the start of it. Now, no general liability policy will ever pay for the clean-up of an event – that’s where pollution policies go above and beyond, because we can and will pay for a clean-up.”
That distinction is critical. At Intact, their environmental policies provide first-party coverage, something general liability cannot offer as it relies wholly on third-party claims – shifting the practice from reactive to proactive risk management.
Because as environmental risks have evolved, so too has the insurance response. Today’s policies are far more tailored, reflecting the complexity of modern exposures. As Duca told IB, environmental insurance is continually evolving, with specialized coverage being added to policies every single year. This is particularly important as new contaminants and risks continue to emerge.
“Today, there are products or contaminants that we just weren’t looking for 20 years ago. Perfluorooctanesulfonic acid (PFOS), forever chemicals, pesticides, and herbicides – they’re always in the media. [As such], now we’re able to customize the policy specifically to the needs of the individual buyer. At Intact, our coverage is very customizable [because we know] it’s important to be flexible.”
It comes down to a partnership Beyond product design, the way environmental insurance is delivered is also changing, with speed and data becoming critical differentiators in a competitive market.
“In today’s market, you have to be fast but you have to be thorough,” added Duca. “Those two things really don’t go hand in hand, but that’s what we have to be. We [leverage] a lot of data and analytics as well as some predictive models that help us here. And we’re also continuing to see more enhancements with AI. Where previously modeling took a lot of human intervention, we now have the ability to upload information into systems that provide us with more predictive analysis than ever before.”
Ultimately, environmental insurance in 2026 goes way beyond policies and pricing; it’s really built on trust. And that’s something that’s core to Intact’s customer promise.
“At the end of the day, it comes down to a partnership,” Duca told IB. “We don’t want to be a commodity. What we sell is a promise to pay. And when you promise somebody something, there’s a lot of trust involved. At Intact, that’s just what we do. We [cultivate] a partnership, building relationships and ensuring that the insured knows that we’ll be there when something bad happens.”
Industries Intact serves
Source: Intact
Intact specializes in environmental risk solutions designed to address a broad range of businesses by providing a comprehensive package of insurance and risk management products, which include commercial general liability, contractors environmental liability, professional services liability, environmental premises liability, products pollution liability, follow-form excess, business auto, and environmental excess liability. Intact provides industry solutions for artisans and general contractors, environmental consultants, and environmental contractors.
Intact’s OneQuote™
Source: Intact
Through our on-demand quoting tool – OneQuote™ for Contractors Pollution – approved insurance agents and brokers can save time by responding to their client’s contract requirements with tailored Contractors Pollution Liability coverage for select classes of artisan, trade, and general contractors.