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Environmental Liability Insurance

Collecting water samples for the analysis of its pollution near to an industrial complex

What is environmental insurance?
Also known as Environmental Impairment Liability (EIL), this insurance covers claims for personal injury, damage to property, clean-up expenses, legal expenses or fines that have been incurred as a result of pollution.

Why do you need to ensure against the risk of causing damage to the environment?
Since 2009, the EU Environmental Liability Directive (ELD) has aimed to encourage businesses to take more ownership of the risks they may pose to the environment. Businesses are now liable financially for the cost of any damage their pollutants have caused. Under the European directive, the business must investigate the cause of the contamination and pay for remedial action.
Should contamination be as a result of individuals in that company being negligent in their duties, it can be considered an offence which – if it comes to court – could result in up to two years’ imprisonment, and/or an unlimited fine. It doesn’t matter, either, whether it is pollution caused by contractors. A company can still be liable for contamination events caused by work done by contractors they’ve hired.

Who might need this cover?
Potential buyers of environmental insurance include any business that buys or sells land, uses raw materials, produces waste or undertakes groundwork has an environmental exposure.
For Real Estate this would include such issues as historical contamination/legacy issues taken on by contract and Tenants actions resulting in landlord being liable for clean-up costs (including waste crime).

To read more on this subject click here for our information sheet on Environmental Liability Insurance