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Environmental Risk

Protection and preservation of the environment have become key issues for society, governments, and corporations. Given regulatory oversight and social responsibility demands, it’s imperative for companies to identify and manage environmental risks. Our industry-leading specialists can help you solve for these complexities.

When it comes to environmental stewardship, companies today are facing more pressure than ever from regulatory agencies, investors, business stakeholders, and the general public.

Corporations are being called upon to not only avoid impacting the environment as a result of their operations, but also to manage emerging issues such as new contaminants, changes in regulations, product liability, and a changing environment, including more frequent and more severe weather events.

To make matters more complicated, multinational companies have a responsibility to adhere to a wide range of regulations globally. Environmental policies can vary significantly from country to country, making compliance a major pain point. This is especially true in regions where liability for environmental damage tends to be quite high, including the European Union. Mishaps or lapses in oversight can have devastating consequences on a company’s employees and communities, public image, and bottom line.

Marsh’s environmental risk specialists – with backgrounds in engineering, consulting, underwriting, and risk management – can help your company understand the risk implications of the complex landscape of environmental regulations and their impact on stakeholder expectations. We also can help you put in place appropriate risk management solutions, so that you can remain focused on achieving your business goals.

The Global Risks Report

The top risks for 2024 and beyond. Data and insights from more than 1,400 global experts and leaders.

Featured insights

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UK Environmental Market Update

The UK Environmental Impairment Liability Insurance market continues to be considered stable and benefits from strong insurer and reinsurer support with capacity and appetite to expand.

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Environmental, Social, and Governance Factors - A Rapidly Evolving Landscape

Given the changing market, insureds should proactively include their response to ESG issues as part of their underwriting submission.

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UK Environmental Market Update: June 2020

Premiums for environmental cover have remained flat on average and capacity and appetite to underwrite environmental risks in the London market is still high.


Many companies are making dedicated efforts toward addressing and mitigating environmental risks. A particular challenge facing many multinational companies is that of oversight. Although it may be relatively easy to have environmental controls and standards in place, it's often difficult to maintain close supervision of all locations to make sure policies are being followed by local and regional employees or contractors and in line with local and regional requirements. 

Certain exposures also can be challenging to predict, specifically industrial environmental accidents, which can range from explosions and chemical leaks to oil spills and more. These situations can unfortunately even occur with a robust risk prevention and mitigation plan in place. For example, a severe weather event or earthquake could cause damage to a manufacturing plant that otherwise had risks managed, leading to a chemical spill or explosion. Under these circumstances, it's in a company’s best interest to have a well-developed emergency response plan and the support of trusted environmental risk advisors.

As with most risks, prevention is the key to managing business risks involving the environment. It's important to recognize and address your company’s risk exposures, with the help of internal and external stakeholders, as well as trusted global environmental risk advisors. 

Although your company’s stakeholders may have a deep understanding of nuanced environmental risks specific to your business practice, external risk advisors may have additional industry knowledge and valuable perspective regarding risk prevention and mitigation strategies. When it comes to developing a comprehensive environmental risk management plan, a team approach is often necessary.

Since damaging environmental situations can often arise without warning, it's also a good idea to have a robust crisis management strategy in place. Environmental risk advisors can help with this too, collaborating with your company’s leadership and legal or public relations team as needed.

An environmental risk review and policy audit seeks to compare the impact, or potential impact, of certain activities on the environment, as compared to existing standards. The purpose of an environmental risk review and policy audit is to identify and understand existing risks posed by normal business operations ― based on the collection of objective data ― to help better inform your insurance purchasing decisions. This information can also help your company’s leadership assess future risks based on existing exposures, in hopes of engaging in preventative actions. 

Environmental risk reviews and policy audits have become more popular in recent years, as companies are being held to higher standards of responsibility and environmental stewardship. The information obtained from an environmental risk review and policy audit can be used as a valuable management tool, creating a trail of documentation. It can also help customers and industry regulators appreciate your company’s willingness to take an active role in monitoring environmental practices, which can promote trust and help align your company’s mission with public opinion.

Finally, an environmental risk review and policy audit can help to maximize your recovery in the event of an insurance claim.

Global leadership

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Chris Smy

Global Environmental Practice Leader

  • United States