Pollution Legal Liability

Pollution losses are growing in frequency and severity. Widespread public concern over human environmental impact, climate change, and natural resources damage are driving much of this activity. Virtually every industry can expect increased compliance obligations from environmental regulators, as well as greater exposure to toxic tort lawsuits, business continuity issues, and reputational risk. Pollution legal liability (PLL) insurance provides coverage for these environmental risks that typically are not covered by traditional property and casualty policies.

Environmental losses can arise from pollution incidents that occur during day-to-day operations at a site, or historic pollution that is present at a site, but has not yet triggered a claim. In addition, new technologies, as well as business practices centered around environmental, social, and governance (ESG) issues, may create unforeseen site pollution exposure. Typically, traditional property and casualty insurance programs either completely exclude coverage for these exposures or cover them on a very limited basis.

PLL insurance can remove these gaps, offering coverage for items such as:

Cleanup costs for pollution incidents that occur onsite or migrate onto neighboring properties.
Pollution damage to natural resources e.g., wetlands, aquifers, wildlife habitats, etc.
Third-party bodily injury and property damage claims arising out of exposure to site pollutants.
Pollution resulting materials transported to and from insured sites.
Business interruption caused by a pollution incident at a site that requires cleanup.
Liability for waste material generated at a site and sent for offsite disposal.
All associated legal defense and environmental consulting costs.

PLL insurance can also facilitate stock and asset transactions where historic pollution exposure might otherwise present significant obstacles to closing. While known pollution conditions are typically not insurable under PLL programs, certain carriers are willing to consider limited coverage for these conditions that all transactional parties can accept. PLL insurance can also be used in tandem with reps and warranties insurance, as well as alternative risk transfer mechanisms such as remediation cost cap and environmental liability buyout.

Marsh’s Environmental Practice has specialists who are well versed in helping identify your environmental exposures and working with the environmental insurance market to write PLL insurance to cover them. We also work closely with our property, casualty, and transactional risk teams to identify gaps in environmental coverage that can be addressed with PLL insurance.

Why Marsh

As an industry leader in providing environmental placement and claims solutions, our team handles more than 500 claims annually and has advocated on more than 2,500 claims in the past five years. Among our 40 dedicated environmental colleagues, nearly half have received Risk & Insurance’s Power Broker award, a designation given to risk management professionals based on demonstrated excellence in solving insurance-related issues, per client testimonial.

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Pollution Legal Liability

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Matthew Kern

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Pollution Legal Liability

Specificity

Stability

Confidence

Why Marsh

Our people

Matthew Kern

Related insights

Understanding and addressing PFAS: Risks, regulations, and mitigation strategies

Mitigating potential environmental risk to facilitate asset sale

Effective risk management in the clean energy transition

Supporting the transition to clean energy