Environmental impairment liability insurance
Specialist cover for sudden and gradual pollution, clean-up costs and environmental liability, which general liability excludes or limits.
A company's general liability policy in principle covers only sudden, identifiable accidental pollution, often under a modest limit. It leaves aside gradual pollution, a slow tank leak, chronic seepage, which nonetheless accounts for most environmental claims, as well as damage to the environment itself when no identified victim claims. Environmental impairment liability insurance fills this gap. It covers third-party damage caused by sudden or gradual pollution, clean-up costs on the insured site and neighboring land, emergency costs to contain a pollution, and remediation required by the authorities under environmental liability law. In France, the market is organized around Assurpol, a co-reinsurance pool created in 1989, which pools capacity and expertise that few insurers hold alone. Underwriting rests on a site audit: activity history, storage of hazardous products, sensitivity of the surroundings, nearby groundwater. The difficulty is temporal: a pollution may remain latent for decades, hence policies often written on a claims-made basis with a retroactive date, and exclusions of known or prior pollution.
Textbook case: a metal finishing plant discovers that a tank has been leaking for years and has contaminated the groundwater. Its general liability policy declines, the pollution not being sudden; its environmental impairment policy pays for the clean-up ordered by the prefect and the claims of neighboring farmers.
environmental impairment liability, EIL, pollution legal liability, Assurpol
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.