Environmental issues continue to be a headline business risk as regulatory and public pressure regarding environmental performance increase. Environmental risks related to the protection of water resources, impacts to human health, and the maintenance of biodiversity and the quality of the environment may result from the activities of industry. For multinational companies, complying with the wide range of environmental regulations, including liability for causing damage to the environment under the European Union Environmental Liability Directive, and others, means environmental exposures threaten the achievement of successful business outcomes.
Marsh helps you to navigate the increasingly complex landscape of regulations and stakeholder pressures by providing an assessment of your environmental risks, determining appropriate environmental risk management solutions and identifying and negotiating environmental insurance solutions where necessary. Our environmental insurance brokerage team – one of the world’s largest – is staffed by professionals drawn from engineering, consulting, underwriting, business, and risk management. These professionals, members of a team dedicated solely to environmental risk, benefit from a collaborative culture that encourages knowledge sharing, helping to ensure you have access to best-in-class solutions.
The result: expert advice to drive an optimised environmental risk management solution providing protection for your balance sheet and reducing your total cost of environmental risk. Marsh can be a trusted adviser to help you reduce environmental risk and achieve your business goals.
What are the main environmental coverages available to clients?
Depending on the risk transfer requirements, whether operational risk, historic pollution liability or risks from developing land, covers available include:
- Clean-up costs on your site and migrating from your site
- Environmental and pollution policies
- Third party bodily injury and property damage
- Gradual pollution as well as sudden and accidental
- Remediation costs (including investigation costs)
- Environmental damage without pollution trigger
- First party business interruption
- Restoration of environmentally damaged sites including complimentary and compensatory actions required by law
- Loss prevention and mitigation
- Emergency costs
- Transportation and offsite activities
- Defence and assessment of claims
- Nuisance claims including odour
- Protection for directors & officers
- Historic pollution
Additional benefits include access to professional, reliable and specialised response support in the event of a pollution incident as well as specialist environmental claims expertise.
Do I need a separate policy when I have sudden and accidental pollution cover?
In the event of a pollution incident, there will be cover under an environmental policy for the immediate actions needed to prevent or mitigate the incident from getting worse. There would be no issue as to whether the event was sudden and accidental because under an environmental policy, pollution is pollution.
Environmental impairment liability policies fill the gaps in a standard general liability and property programme - in some circumstances clients are unaware that their coverage does not extend as far as environmental liability. Consider that you may have no cover for gradual pollution, remediation of your own site, biodiversity damage or statutory liabilities for remediation or for dealing with imminent threats.
My property policy covers property damage - why buy an environmental policy?
Property policies provide cover for claims resulting from insured damage, but cannot be relied upon to provide full protection for environmental liabilities.
There are several reasons for this. Firstly, cover is only provided in respect of specific buildings and does not as a general rule include land. Secondly, whilst resultant environmental damage to insured buildings may be covered, if contamination enters the soil remediation costs are unlikely to be picked up. Thirdly, many property policies incorporate a qualified or absolute pollution exclusion. Finally, where coverage is provided it is often tied to sudden and accidental events only and sub-limited at an inadequate value.
Am I liable for pollution on my land if I didn't cause it?
The overarching principle of environmental liability is 'polluter pays', but if the polluter cannot be found the secondary port of call is usually the property owner. There are also instances in sale and purchase agreements where the contaminated land liability is transferred by contract, which means you may have pay to clean-up a contamination on your site.
If fines and penalties aren't covered, why take an environmental policy?
When a pollution incident occurs the only reported number tends to be the fine imposed. Fines are intended to deter the operator from reoffending and are not insurable by law in most jurisdictions. However, operators also face background costs such as the clean-up operation, defence, long term remediation and monitoring. In addition, support from the right people can be invaluable in the aftermath of an incident.
Are environmental policies expensive, with onerous information requirements?
Due to a large increase in numbers of carriers providing standalone environmental product in recent years, competition has increased, reducing price and information requirements dramatically. Marsh is one of the leading specialty brokers, a position we use when negotiating on your behalf.