By Elise Linscott
Wells Fargo Insurance announced last week the launch of its Proposition 65 insurance program to cover manufacturers, distributors and formulators of products that contain any of six plasticizers covered under the state’s Prop 65. It’s the first liability insurance program tailored to provide financial protection for these businesses, the company said.
Claims and lawsuits stemming from Prop 65 are costly. 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 wrote 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 specialist insurer.
Wells Fargo worked closely with the Trade Association of the Plastics Industry to develop the new program. Currently, California Prop 65 covers more than 800 chemicals, and the Prop 65 insurance program will provide coverage related to the following plasticizers: DEHP, DBP, BBP, DIDP, DnHP, and DINP3.
Wells Fargo Insurance writes or places about $11 billion of risk premiums annually in property, casualty, benefits, international, personal lines, and life products, and also includes one of the nation’s leading crop insurance providers, Rural Community Insurance Services (RCIS), according to Wells Fargo.