An area of risk that many companies overlook is environmental impairment liability.
Regulations exist which impose responsibility for environmental damage. These regulations implement a ‘polluter pays’ principle, meaning that businesses must take precautionary measures to prevent environmental damage and take remedial actions if damage occurs. Failure to comply with regulations and or maintain proper standards can lead to high costs—from initial clean-up fees, remediation costs, fines and penalties to even imprisonment.
Many businesses mistakenly assume that their existing liability policies will also cover any issues that arise with pollution. Traditional public liability policies provide cover for pollution arising out of sudden & accidental occurrences only. There is no cover for any ‘gradual‘ pollution which may have built up over a period of time. This can leave a massive exposure gap. Environmental impairment liability, or environmental insurance, can plug this gap and go even further by offering cover for clean-up costs.
What does it include?
Policies will vary widely based on the insurer. Typical policies can include:
- Own site clean-up costs
- Third-party clean-up costs
- Investigation and defence costs
- Gradual pollution for third party legal liability during policy period
- Cover for both new and pre-existing pollution incidents; each may have their own limits of liability, terms and excesses
- Bio-diversity damage or environmental damage to protected sites or sites of scientific interest
- Business interruption in the event production needs to stop or there is intervention by a regulator
A policyholder will typically have a duty of mitigation, meaning that it must take all actions to minimise the extent of the damage and prevent it from spreading.
Environmental impairment liability policies change from insurer to insurer. By working with ProAktive, you can be rest assured that your policy fits your business’ needs and keeps you compliant with the latest, most stringent regulations. We will work with you to help gauge your risks and make sure your business stays up and running, all while minimising its negative environmental impact. Call us on 01302 341 344 or 0114 243 9914 to discuss.