Environmental Risks Insurance

Environmental Risks – What is it?

There is a growing awareness of environmental concerns and tougher environmental regulations from all levels of government, it has become more necessary for companies to take steps to protect themselves against environmental risks.

Environmental Risk Insurance is becoming an increasingly important cover for all businesses. Not just the increasing liability exposures which can impact their bottom line but also the increasing legislation allowing for heavy fines and penalties. Then there is the often forgotten resulting damage to both a business’ reputation.

Pollution can bring about a number of risks and exposures for companies and many standard business insurance policies provide only partial cover for some of the risks that arise when an industrial pollution event occurs. Usually it may be limited due to various policy exclusions.

Sudden and accidental pollution may be covered but events such as the gradual pollution of an area due to a slow leak or contamination may not be. This type of pollution is hard to identify but can be environmentally disastrous, not to mention a financial catastrophe for any company.

Companies without an Environmental Risk policy may also encounter potential grey areas surrounding various types of pollution incidents. This makes it difficult to prove it fits in with the coverage provided when making a claim. Remediation work or restoration, may also be specifically excluded.

Some insurers now offer carefully worded policies to protect companies against the financial risks involved in environmental pollution so that a business is covered if the unfortunate event of environmental pollution occurs.

What does Environmental Risk Insurance cover?

These policies seek to provide cover against the financial risks involved with pollution. Pollution liabilities are no longer the impossible risk management problems they once were. Today, Environmental Risk Insurance offers a full range of environmental liability solutions, from traditional risk transfer for simple operational exposures, to custom structured programs designed specifically for complex merger, acquisition or liability relief transactions.

These Environmental Insurance policies can cover sudden and accidental pollution as well as gradual pollution and includes:

  • Clean-up costs
  • Consequential Loss caused by pollution
  • Third party bodily injury
  • Third party property damage
  • Third party clean-up costs
  • Defence costs
  • Fines and penalties (but not for criminal acts)

Who needs these types of cover?

Some Environmental Risk policies are structured to target particular businesses and the operational risks they may face, environmental liability offering can include:

  • Premises pollution liability
  • Contractors pollution liability
  • Remediation cost containment

These covers can be specifically tailored for industries such as:

  • Chemical Manufacturing, Blending and Distribution
  • Mining
  • Utilities
  • Bulk Storage
  • Laboratories
  • Industrial Facilities
  • Recyclers
  • Landfills
  • Water Treatment Plants
  • Waste Treatment Storage Facilities

In Conclusion

Overall, the benefit of an Environmental Risk insurance policy is that it can fill the gaps in pollution liability coverage that exist in a company’s existing insurance policies. This can significantly reduce exposures that may be uninsured under the business’s pollution liability policy.

It is important that environmental liability covers go further than mainstream offerings. We help our clients identify potential risks, determine either risk transfer or alternate solutions to minimise potential impacts to your bottom line. So call CPR Insurance – experts who will save you!

Queensland Government Environmental Risks Web site

Examples of Claims Scenarios around the World

  

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