Wells Fargo Insurance has announced last week the launch of its Proposition 65 insurance program to cover manufacturers, distributors and formulators of products that contain any of six phthalates covered under the California’s Proposition 65. It’s the first liability insurance program tailored to provide financial protection for these businesses, the company said. Claims and lawsuits resulting from Prop 65 enforcement actions are costly, the company notes. The average settlement cost for these claims exceeds $80,000 with fines costing as much as $2,500 per exposure per day, according to Wells Fargo Insurance. “Existing general liability, product, and pollution policies currently do not provide coverage, which puts companies at financial risk if faced with a Prop 65 civil lawsuit,” the company said in a press release. “Under Wells Fargo Insurance’s program, companies can now mitigate risk by securing coverage to provide protection from the costs associated with defending a Prop 65 lawsuit specific to plasticizers, including fines, penalties, legal costs, and expenses.” The coverage will be serviced by Safehold Special Risk Inc., a division of Wells Fargo Insurance, and underwritten by Hiscox, a leading specialty insurer. Wells Fargo worked closely with the Trade Association of the Plastics Industry to develop the new program.
California’s Proposition 65 includes more than 800 chemicals and substances. The Prop 65 insurance program will provide coverage related to the following plasticizers: DEHP, DBP, BBP, DIDP, DnHP, and DINP.
Two previous attempts by small specialty insurers to provide Proposition 65 insurance failed to be viable. Wells Fargo Insurance writes or places about $11 billion of risk premiums annually in property, casualty, benefits, international, personal lines, and life insurance products. The company also includes one of the nation’s leading crop insurance providers, Rural Community Insurance Services (RCIS). Wells Fargo’s insurance coverage is focused on the plasticizers mentioned above, and does not apply to other types of businesses that would benefit from a policy that would cover the costs associated with a Proposition 65 enforcement action.