Environmental Impairment Liability Insurance

The risks you face…

As our society grows ever more environmentally aware, a far broader range of businesses face new and often previously unseen environmental damage risks as a result of their day to day operations.

Contrary to popular belief, environmental pollution is not just a concern of those involved in heavy industrial activities such as metal smelting, petroleum refining and chemicals manufacturing. It can impact on any type of business, even seemingly innocuous ones.

Environmental laws and regulations in the UK and Europe are continually evolving, potentially creating new and challenging environmental exposures for businesses. From a property perspective the overriding basis of the exposure is that the polluter pays; and if the polluter can’t be found or is not capitalised to pay for the costs of clean up, the next in line is typically the owner of the property from which the pollution originated. So that could be any property owner.

What are the causes of environmental damage liability risks?

An environmental damage incident may be caused by historical activities or ongoing operations, or even as a result of the actions of the emergency services in the normal course of their activities (such as the fire brigade extinguishing a fire on your premises). The impact can be disastrous and costs can emanate from the following sources:

  • Remediation costs enforced by the regulatory authority – Authorities have extensive powers to force businesses to remedy environmental impact including first party clean-up costs
  • Recovery of costs of emergency work – Any work carried out by the regulatory authority can be billed to the polluter
  • Claims for damages from third parties – This can include bodily injury, property damage, nuisance, legal costs and expenses

If an environmental impairment incident does occur it can cause significant financial, social and reputational damage, and every type of business is potentially at risk.

Environmental Insurance

Many insured businesses expect their general liability policy to provide the environmental damage cover they need; however, this is not typically the case. For example, general liability policies do not cover bio-diversity damage, statutory clean-up costs, on site clean-up costs, gradual pollution or loss mitigation costs. It should also be noted that Public Liability policies operate on a legal liability basis whilst environmental policies have a regulatory intervention trigger.

PIB works with specialist environmental pollution insurers to provide environmental impairment insurance for premises environmental damage liability and construction environmental damage liability.

Premises environmental liability insurance

These policies provide cover for insured locations with respect to:

  • Historic contamination
  • Legacy risk following acquisition or divestment
  • Operational environmental risks
  • Flexible protection for first and third party environmental liabilities caused by sudden and accidental, as well as gradual pollution
  • Cover for clean-up costs imposed by a regulatory authority
  • Full third party legal liability, including nuisance
  • First party business interruption
  • Pollution during transportation of products or waste

Construction environmental liability insurance

These policies provide cover for insured locations with respect to:

  • Covered operations, which could include a wide range of activities from facilities management to heavy civil construction
  • Annual and single project policies
  • Transportation environmental risk

Get in touch

If you would like to speak to one of our experts to learn more about how our environmental damage insurance products can help you, please get in touch with us today.