Wells Fargo Offers Proposition 65 Insurance
Wells Fargo Insurance has announced a Proposition 65 liability insurance program, for Proposition 65 claims involving the six phthalate chemicals on the Proposition 65 list:
- Diethyl hexyl phthalate (DEHP)
- Diisononyl phthalate (DINP)
- Dibutyl phthalate (DBP)
- Benzyl butyl phthalate (BBP)
- Di-n-hexyl phthalate (DnHP)
- Diisodecyl phthalate (DIDP)
These phthalates, used as plasticizers in a wide variety of products, have been primary targets for hundreds of Proposition 65 enforcement actions. Insurers typically refuse to provide coverage for Proposition 65 claims under ordinary business liability policies (but businesses nevertheless should always consider tendering such claims to their carriers). Previous insurance products for Proposition 65 claims involving dietary supplements were withdrawn shortly after they were made available. Thus, this Wells Fargo insurance product represents a significant development with Proposition 65 insurance coverage. The insurance program covers fines, penalties, legal costs and expenses associated with Proposition 65 enforcement actions, and is intended to provide protection for product manufacturers, distributors and formulators of phthalate-containing products.
The hundreds of enforcement actions involving these phthalates have established a fairly predictable framework for resolution (albeit one that is unnecessarily conservative for a vast majority of products): the product content level cannot exceed 0.1% of the phthalate at issue. This predictable foundation for resolution, combined with strong support from SPI, The Plastics Industry Trade Association, no doubt contributed to the development of this insurance product.