As part of our expanded coverage of our 2026 Environmental Power Broker® winners and finalists, Risk & Insurance® recently spoke with Jeff Duca of Intact Insurance Specialty Solutions. Intact was a sponsor of this year’s class of environmental Power Broker winners. What follows is a transcript of our discussion, edited for length and clarity.

Risk & Insurance: Thanks for meeting with us Jeff. How does the regulatory landscape that impacts the environmental insurance market look these days?

Jeff Duca: We’ve dealt with regulatory changes for a number of years. What’s unique about the environmental space is that it’s very state-driven rather than federally driven. This creates a whole different set of challenges because we don’t see much at the federal level—it’s more at the individual state level where we’re dealing with different rules and regulations around water quality levels, air quality levels, and release levels.

Different states view things very differently depending on their makeup, and that really has an impact. For example, a water-rich state approaches regulations differently than a water-scarce state. Some states are extremely industry-heavy with specific industries—like oil and gas down in the Gulf—versus states that don’t have any exposure to that.

It’s unique because we ultimately have to customize coverage in 50 different ways.

R&I: Which states or groups of states tend to be more aggressive in their regulatory approach?

JD: It’s usually the states with large populations and where the population centers are— because of the sheer number of people and the time that industry has been established in those areas.

In some less populated states, the regulatory approach may be less aggressive, though it depends on the specific state. What really drives a state’s regulatory attention are contamination events. Groundwater contamination is usually the most prevalent issue that turns a state’s eye to these matters.

R&I: What impact are the frequency and shifting geographic patterns of severe weather having on environmental exposures and loss trends?

JD:. It’s definitely impacting the way insurance carriers respond, especially when it comes to environmental insurance. There are new exposures that ten, fifteen, twenty years ago we weren’t looking at that are now more impactful than ever.

The focus now is more on micro weather events. Where it used to be that everyone would see a bigger weather event coming — like a hurricane — and know its size, now it’s the microburst storms that create bigger problems. Flash flooding is probably the biggest example of that, along with lightning strikes that come out of these storms.

We’re seeing a lot more lightning strike claims that cause pollution events, usually in heavy industrial areas or big facilities. A lightning strike can lead to a loss of some sort —usually power-related, but it could also be a fire. Then there’s the question of what they’re using to put that fire out from an environmental perspective.

We’re also seeing large petroleum or oil tanks being hit and catching fire. We just didn’t see a lot of that before — it wasn’t as prevalent. It’s more tied to these microburst storms than anything else.

R&I: What environmental exposures are associated with data centers?

JD: When it comes to data centers, environmental policies and insurance touch a couple of different aspects. There’s the build-out phase, where contractor’s pollution liability exposure addresses anything that can be upset, triggered, or caused by the construction process. But really, I think the impact is in the ongoing use of the facility once the build-out is done.

What is this facility doing to the environment, and what are the potential impacts? A lot of recent discussion has been around water and water use because of cooling.

This goes back to water-rich states versus water-scarce states, which are impacted differently. If you’re water-rich and don’t have issues with water scarcity, you’re probably not going to see many issues with the actual use of water. In states where there are drought issues, there could be significant pressure on data centers related to their water usage and where they’re pulling that water resource away from — whether it’s farming or drinking water.

Then there’s, of course, water contamination. They’re using this water to cool facilities that could be thousands and thousands of square feet — how are they getting rid of it, discharging it, and cleaning it?

There are environmental policies that can respond and assist with that, but right now, it’s an unknown exposure. I wouldn’t be surprised if many of these facilities put water treatment facilities on-site to protect against that.

R&I: Is there clarity yet on the level of water contamination from data center runoff?

JD: I think everybody’s going into this with their eyes wide open, understanding that water discharge will be a major focus point from an environmental impact perspective. As a result, they’re going to put the right tools in place to prevent environmental issues from occurring.

However, it’s important to note that each state is very different. In some states, even discharging clean water in the wrong place could be considered a contaminant because of the damage it causes. If there’s simply too much water somewhere, it could be classified as a contaminant.

The impact on these facilities is very specific and can come down to individual state, county, and local rules and regulations regarding water discharge.

R&I: What should brokers understand about crafting environmental policies?

JD: I think what’s important when it comes to crafting an environmental policy is understanding that it’s a very different market than standard insurance. Unlike standard policies, we’re not starting from the same ISO GL policy as our jumping-off point. Everyone has their own very specifically crafted language.

Brokers have to understand that coverage comparison across different carriers is critically important. You can’t just say a policy includes certain coverage because you’re assuming it follows a standard form.

A lot of times, people only look at exclusions and endorsements, but there’s significant crafted language inside the body of a policy that dictates what’s covered and what’s not. This is really important because it can create big coverage gaps. You might assume that a site pollution liability policy should include certain coverage, but that’s not necessarily the case.

It’s important that brokers conduct thorough coverage analysis. It comes down to being very cognizant of the differences in policy forms. It’s definitely a unique skill set, but we work with a lot of good people who already understand these nuances.

R&I: Does state-by-state regulation of environmental contaminants and infractions impact insurance coverage?

JD: Yes and it’s very important that brokers understand what they’re dealing with. You could write a policy for one site in one state, or you could write a policy that covers six sites in six different states.

You have to make sure that the coverage lines up with the rules and regulations from an environmental perspective in each state.

R&I: What happens when a water discharge issue crosses state boundaries, for example when a discharge originates in Minnesota and flows south into multiple states?

JD: This absolutely happens when you have releases into bodies of water that are shared by states. You can have situations where certain states come after you differently.

Some states don’t care, while other states have a different level of concern and will try to bring suits or apply pressure against you to stop the discharge. So it’s definitely a concern.

Does it happen all the time? No. But it happens, and it can be messy.

R&I: What are the key differences in environmental requirements between major commercial transactions and mid to small scale deals, and what should brokers be aware of?

JD: The biggest difference when you’re talking about scale relates to prior use. This is especially true with large risks that have been established and operational for many years, or where something was previously operational at that site. The preexisting conditions or uses of a property become a major concern.

For example, we look at properties where there used to be gas stations on the site fifteen, twenty, or thirty years ago, and we need to consider what impact that had. Or consider a data center built on property that was a golf course for thirty years — what was the impact of all the fertilizer and other chemicals used to control overgrowth of weeds? These factors most often come into play with large-scale properties because they’re usually on established pieces of property that could have years of contamination — contamination that is known, unknown, has been cleaned up, or partially cleaned up.

With smaller to mid-size transactions, while prior use still applies, more often it’s about making sure the buyer is educated on the property they’re buying and that you’re providing them what they need. These buyers may not have had to purchase environmental insurance before and may need more information.

R&I: What should facilities consider when assessing environmental risks in relation to neighboring properties?

JD: You could be impacting three different facilities that share a border with your property, or perhaps they’re impacting you. That’s an important piece of information to understand — it’s not always you causing the problem. It could be a neighbor.

Understanding what’s around you and identifying sensitive environmental receptors in the vicinity is crucial. These receptors aren’t always visible. For example, you might be near a body of water—how close is the water table, and how deep is it?

What could be a couple miles away that could be impacted? Those are the types of concerns you need to consider.

R&I: How would you describe the pricing and capacity picture in environmental insurance in terms of competitiveness?

JD: It’s more competitive than it’s ever been. The reason is that there are far more carriers, MGAs, and other avenues providing environmental insurance than there were twenty years ago. Twenty years ago, you could count on one hand how many carriers provided site pollution liability, and that has multiplied tenfold — some people say there are now 40 to 50 environmental markets offering some type of coverage.

That level of participation makes it very competitive. However, every player has their own special niche that they stick to.

From a capacity perspective, we’re very much in line with what’s been happening in the overall general liability market, where we’ve seen significant tightening in excess limits. There used to be the ability to get an entire insurance tower completed with one or two carriers, and now it requires five, six, or even eight carriers.

In the past six months, I’ve started to see quota share excess towers in the environmental space, which is definitely new for environmental, though it’s not new to casualty or property. A lot more players are unwilling to extend big lines of insurance unless the risk makes sense, so you’re seeing smaller excess tranches across the entire environmental industry.

R&I: How does increased market complexity affect the timeline brokers need for managing renewals?

JD: You definitely have to be out in front of it. It used to be maybe 60 days, but now you’re 90, maybe 120 days out asking and confirming availability. This is especially true when a broker needs to confirm capacity with their markets.

I think the bigger concern for brokers is confirming that the limit options they had are still available for renewal. We’ve seen a lot of situations where everyone still wants to be part of the risk, but everyone wants a little bit less of it.

R&I: Are insurance ratings becoming a more prominent factor given the influx of new, potentially more aggressive competitors without established histories?

JD: It definitely comes up, particularly around financial strength concerns. The first question I typically see from brokers and clients is about the differentiation between MGAs and insurance carriers — they want a clear understanding of what that distinction means and what it entails. Then the conversation shifts to financial strength.

Years in the business and corporate backing are important factors in that assessment. But look, there are a lot of new markets out there — one, two, three years old — including MGAs and even well-established carriers with great financial strength that are new to environmental. &