environmental risks: insured or not? - innovative … risks: insured or not? - page 1 ... the rule...

Environmental Risks: insured or not?

In association with:

Published by:

International Underwriting Association of London Limited3 Minster CourtMincing LaneLondon EC3R 7DDUnited Kingdom

Telephone +44 (0)20 7617 4444Email: [email protected]

In association with:

Association of British Insurers51 Gresham StreetLondon EC2V 7HQ

Telephone: +44 (0)20 7600 3333Website: www.abi.org.uk

British Insurance Brokers’ Association8th FloorJohn Stow House18 Bevis MarksLondon EC3A 7JB

Steve Foulsham Email: [email protected] Staddon Email: [email protected]

Website: www.biba.org.uk

With thanks to:

Mr. Aidan ThomsonPartnerBarlow Lyde & Gilbert LLPBeaufort House15 St Botolph Street London EC3A 7NJ Telephone +44 (0)20 7643 7747Email: [email protected]

This publication is only int ended to convey general information about environmental liabilities andassociated insurance coverage. It is not, and is not int ended to be, a complete statement of the lawrelating to environmental liability and insurance. It should not be relied on or be used as a substitutefor legal advice in relation to any particular set of cir cumstances. Accordingly, IUA, ABI, BIBA andBarlow Lyde & Gilbert LLP do not accept any liability for any loss which may arise from reliance on thispublication or the information it contains.

First published 2010

© Copyright: International Underwriting Association of London Limited

Reproduction of the information in this publication is permitted provided that this is accompanied bya statement in the following form: “Information taken from ‘Environmental Liabilities: insured or not?’published by International Underwriting Association of London Limited.”

Summary of key points

Environmental Risks: insured or not? - page 1

In recent years, liability for environmentalharm has become much more common.

Why is this? Bit by bit, the old tort system,in so far as it relates to environmentalmatters, has been bolstered by anelaborate system of statutory liability. Thestatutory system is generally much moreeffective than tort at imposing liability onpolluters for the environmental harm thatthey cause and already underpins themajority of UK environmental liability cases.

The statutory liability system is growing allthe time. Last year, for example, as a resultof the Environmental Liability Directive, theenvironmental damage regime wasintroduced in the UK. It increased thepotential remediation liability of operatorsthat cause environmental damage at astroke. Who knows what might happen inthe future? Some commentators think thateven a statutory liability regime for damagearising out of climate change could beintroduced one day.

Although both types of liability lead tosimilar practical consequences for theorganisations that incur them (namelypotentially considerable expense and effortover a long period), tort liability andstatutory liability are actually very differentlegal beasts indeed.

When it comes to insurance cover forenvironmental matters, the difference hasimportant repercussions. The key thing toremember is that the insuring clause oftraditional liability policies (in particularpublic liability policies) coversenvironmental liabilities established in tortbut stops short of covering liabilitiesestablished under the very differentstatutory environmental liability system.This point was rammed home in starkfashion in the 2006 Bartoline decisionwhere, when it was made liable by theEnvironment Agency for significantstatutory remediation costs, a companyfound that its public liability policy didnot respond.

Traditional liability policies are, of course,indispensable for dealing with a diverserange of the more common liability risks.However, the lack of cover provided forstatutory environmental liabilities greatlydiminishes their value as environmentalliability management tools.

When, in addition, the effect of commonexclusions in traditional policies areconsidered (for instance exclusions forgradual pollution and owned property), itbecomes clear that, in addition to their lackof cover for statutory liability issues,


traditional policies only actually provide arelatively basic level of cover for tort-basedenvironmental liabilities.

The fundamental message of this guide issimple. The gap between traditionalinsurance cover and the range ofenvironmental liability to which anorganisation is exposed has becomeuncomfortably wide and will get wider.Insureds need to appreciate the extent ofthe gap in their particular case andunderstand what products are available tofill it. There is a very good range ofspecialist environmental insuranceproducts currently available in the UKmarket.

Below, we look at:

■ The different types of environmentalharm and the ways in which it can occur;

■ The four main environmental torts andwhy they impose liability in a limitedrange of situations;

■ The statutory environmental liabilityregimes, which in practice imposeliability in the majority of situations;

■ How liability, when it arises, is coveredby traditional policies (if at all); and

■ Environmental insurance policies.


There are four key things to note aboutenvironmental harm:

■ Environmental harm encompasses avery wide range of environmentalimpairments, including pollution of land,waters of all kinds and the air, andbiodiversity damage (i.e. damage toprotected species and habitats).

■ From a temporal standpoint,environmental harm can come about inmany different ways. Sometimes it arisessuddenly and very obviously followingan incident, for example an explosion orpipe rupture. On other occasions, itdevelops gradually and surreptitiously,for example from a leaking undergroundtank, its full extent only coming to lightlate in the day.

■ Organisations can have a hand incausing environmental harm in a varietyof different ways. It can result directlyfrom their on-site operations, but it canalso result from their off-site transportoperations, and from the off-site use ordisposal of their products.

■ Environmental harm can lead to otherproblems, for example illness to thosethat drink contaminated water orbreathe contaminated air; propertydamage to cars showered with corrosivechemicals; or “amenity” issues for thosethat have to live in the changedenvironment.

The environmental torts

Where environmental harm has occurred,four torts can theoretically be used toimpose liability on those responsible:

■ Negligence;

■ Nuisance;

■ The rule in Rylands v Fletcher; and

■ Trespass.

A brief description of these torts is set outin box 1.

Environmental harm and liability


Box 1: The Environmental Torts

Negligence

In very simple terms, liability in negligence exists where one person falls short of the standard of conductthat is expected in relation to another person, and personal injury or property damage results. The scopeof the tort is easily wide enough to encompass situations where, for example, a company carelessly causesthe release of a chemical or waste into the local environment and residents become ill or suffer damageto their tangible property, such as their homes or cars.

Three elements must be present to establish negligence:

■ The defendant must owe a “duty of care” to the claimant;

■ That duty must have been breached. This will have occurred if the defendant falls below the standardof behaviour that it should show towards the claimant; and

■ Personal injury or damage to property must have been suffered by the claimant. This must: (i) havebeen caused by the defendant’s breach of duty and not by some other factor; and (ii) be of a kind thatis not so unforeseeable as to be too remote.

Nuisance

In general terms, private nuisance is unlawful interference with a person’s use or enjoyment of his/herland. The scope of the tort is easily wide enough to encompass, and allocate liability in connection with,a wide range of neighbourhood environmental problems.

Private nuisance can be broken up into three different kinds:

■ Nuisance through an encroachment on the claimant’s land (for example where tree roots grow fromthe defendant’s land onto the claimant’s land or when the defendant’s trees overhang the claimant’sland);

■ Nuisance through physical damage to the claimant’s land (for example, where a defendant company’semissions cause actual damage to a claimant’s curtains or paintwork); and

■ Nuisance through interference with the claimant’s use and enjoyment of the land (for example wherethings like the defendant’s noise, dust, odour or vibration stop short of causing actual damage butspoil the claimant’s enjoyment or “amenity” nevertheless).

Rylands v Fletcher

The judgment in this nineteenth century case established the following strict liability principle for personswho deal with dangerous materials on their property:

“….the person who for his own purposes brings onto his land and collects and keeps there anything likelyto do mischief if it escapes, must keep it at his peril and, if he does not do so, is prima facie answerable forall the damage which is the natural consequence of the escape.”

This tort can potentially encompass, and be used to allocate liability in, a range of environmental incidents.

Trespass

Trespass to land is the voluntary, direct and unjustified intrusion by one person onto the land of another.When it comes to environmental matters, trespass has a relatively narrow scope of application. However,a good example of where the tort of trespass may have been committed is where one person comes ontoanother’s land and flytips waste there.


The shortcomings of tort in relationto environmental liability

In theory, the scope of the four torts set outabove is easily wide enough to encompassthe majority of environmental harmsituations. However, in practice, tort hasbeen criticised for failing to protect theenvironment and deliver environmentalliability effectively. Why is this?

The first reason is that for there to be anyliability in tort, a third party has to beprepared to sue the polluter. Tort actionsare not available to regulators like theEnvironment Agency. There are manyreasons, financial or otherwise, why thirdparties – even if they have suffered at thehands of the polluter - might not want tosue. If they do not sue, there will be no tortliability for the polluter.

Second, tort is largely reactive rather thanproactive. It is able to help compensateclaimants that have suffered injury ordamage, but is often unable to stopoffending behaviour in its tracks before ithas led to environmental harm.

Third, each of the torts has its ownidiosyncrasies which make liability hard toestablish in practice. The main ones are setout in box 2.

Box 2: The problems with tort

Negligence

■ Negligence requires a claimant to show that the defendant has fallen below the standard of behaviourthat it should show towards the claimant. In other words, there must be proof of fault. However, gettingto the bottom of a company’s activities to find out where it went wrong can be extremely timeconsuming, especially if its operations are complex or highly regulated. Demonstrating fault cantherefore be very hard.

■ Negligence also requires a claimant to have suffered personal injury or property damage. These are thethings that are compensated for in the tort of negligence, not the pollution that caused such injury ordamage. Unless personal injury or property damage arises, negligence damages will not be available– even though serious pollution may have occurred.

■ There has to be a causal link between the breach of duty and the damage or injury. This is oftenenormously difficult to show in environmental cases. Much expert scientific evidence could be requiredto show how, for example, a factory’s operations have led to the claimant being exposed to a chemicalin sufficiently high quantities to enable a cancer to develop.

■ Negligence also requires there to have been foreseeability by the defendant of the relevant type ofdamage or injury when it performed the negligent acts. Quite often, the acts under scrutiny werecommitted many years ago. Whilst a type of damage might be foreseeable today, claimants need toshow that it was foreseeable in the past. This can be difficult.

contiuned on page 6


Box 2: The problems with tort (continued)

Private nuisance

■ Like negligence, private nuisance also requires there to have been foreseeability by the defendant ofthe relevant type of damage or injury when it performed the acts complained of.

■ In addition, however, a claimant can only bring an action in private nuisance if it can demonstrate alegally protected interest (e.g. a freehold or leasehold interest) in the property affected. In practice, thisknocks out large numbers of would-be claimants affected by a defendant’s activities.

■ Compensation for personal injury is not possible in private nuisance.

Rylands v Fletcher

■ The rule in Rylands v Fletcher has many of the same idiosyncrasies as negligence (except of course that,with the rule in Rylands v Fletcher being one of strict liability, there is no need for the claimant toprove fault).

■ Compensation for personal injury is not possible under the rule in Rylands v Fletcher.

■ Subsequent case law has made clear that although the rule in Rylands v Fletcher still exists, it willrarely apply on its own in the absence of other torts being committed. In practice, the mischief ordanger requirement is not easily satisfied.

Trespass

■ A claimant must be in possession (i.e. occupation or physical control) of the affected land before itcan sue.

■ Compensation for personal injury is not possible in trespass to land.

Summary of the new statutoryregimes

In recent years, Parliament has introduceda string of statutory environmental liabilityregimes that make up for the lack ofdelivery of environmental liability by thetort system. The regimes have a number ofcommon themes:

■ They focus on a particular type ofenvironmental harm or type of activitythat might cause environmental harm;

■ They are strict liability (thus avoiding theneed to prove fault);

■ They are regulator-enforced (thusavoiding all of the restrictions in the tortsystem associated with who can sue andfor what);

■ They are usually triggered byenvironmental harm or the threat of itrather than by resulting personal injuryor property damage. This makes themmore flexible and more easily triggeredthan the more reactive tort regime;

■ They require the polluter to clean uprather than simply compensate thirdparties for their loss; and

■ They are backed up with criminalsanctions.

There are many statutory regimes. The keyones are set out in box 3.


Box 3: Statutory Liability Regimes

Water Pollution

The most important statutory water pollution clean up provision is set out in Section 161A of the WaterResources Act 1991. Where it appears to the Environment Agency that any poisonous, noxious or pollutingmatter or any waste matter is or has been present in, or is likely to enter, any controlled waters, it canserve a works notice on any “responsible person”.

“Responsible person” means a person who has “caused or knowingly permitted” the matter to be presentin the controlled waters, or to be at a place from which it is likely, in the opinion of the Agency, to enterthe controlled waters.

The works notice can require the responsible person to conduct preventive works, to remove or disposeof the polluting matter, to mitigate the effect of its presence in the water, and to restore the waters,including any flora and fauna dependent on the aquatic environment.

Rather than serving a works notice on the responsible person, the Environment Agency can, if it wishes,conduct works itself and claim the associated cost from the responsible person.

Contaminated Land

Where land satisfies the definition of “contaminated land” in Part 2A of the Environmental Protection Act1990, the relevant local authority or (in some cases) the Environment Agency can serve a remediationnotice requiring clean up.

The notice is served on the potentially wide range of persons who “caused or knowingly permitted” thecontamination to get in, on or under the land. If such a person cannot be found, the notice can be servedon the current owner or occupier of the land.

Waste

There are a number of powers available to regulators to remove waste from public or private land. Inparticular, section 59 of the Environmental Protection Act 1990 provides that if any controlled waste isunlawfully deposited in or on any land in the area of a waste regulation authority or waste collection authority,the authority may serve a notice on the “occupier” requiring him to remove the waste from the land and/ortake steps with a view to eliminating or reducing the consequences of the deposit of the waste.

In certain circumstances, Section 59 of the Environmental Protection Act 1990 allows a waste regulationauthority or waste collection authority to conduct removal works itself and claim the associated cost fromthe occupier.

contiuned on page 8


Box 3: Statutory Liability Regimes (continued)

Statutory Nuisance

Part III of the Environmental Protection Act 1990 deals with statutory nuisances, clean air and controls overoffensive trades. The legislation lists a number of circumstances (involving odour, dust, noise, smoke, etc)that amount to statutory nuisances.

Where a local authority is satisfied that such a statutory nuisance exists, it may serve an abatement noticeprohibiting or restricting its occurrence or recurrence on the person responsible for the nuisance or, wherethat person cannot be found, the owner or occupier of the relevant premises.

Environmental Damage

Where damage has occurred (or there is an imminent threat of damage) to protected species or naturalhabitats, a Site of Special Scientific Interest, waters or land, the environmental damage regime set out inthe Environmental Damage (Prevention and Remediation) Regulations 2009 comes into play.

Operators are required by the regime to be proactive in dealing with imminent threats of environmentaldamage and remediating any environmental damage that does occur. The relevant regulator (usually theEnvironment Agency) will serve a notice on the relevant operator requiring it to conduct potentiallyextensive remediation including ‘complementary’ and ‘compensatory’ remediation. Liability for manyoperators is strict.


It should by now be clear to the readerthat, owing to its unique mix of tort andstatutory liability, environmental liabilityis like no other. This booklet now looks atthe extent to which environmentalliabilities are covered by traditionalinsurance policies.

Do these policies fully cover the exposuresemanating from the developingenvironmental liability system? As willbecome clear, the answer is a definite “no”.Indeed, the gap between traditionalinsurance cover and the range ofenvironmental liability to which anorganisation is exposed has becomeuncomfortably wide and will get wider.

Cover – Public liability insurancepolicies

Public liability policies are extremelycommon. As their name would suggest,they give insureds vital protection againsta variety of general third party liabilitiesthat are occasionally suffered in the courseof day-to-day activities.

However, when it comes specifically toenvironmental liabilities, public liabilitypolicies offer limited protection. Why isthis? In short, public liability policies werenever designed to cover the range ofenvironmental liabilities now encounteredby insureds. Many claims for environmentalliabilities (in particular statutory liabilities)

do not even fall within the insuring clausesof these policies. Of those that do, manyfall foul of the various exclusions and otherclauses that these policies commonlycontain. This is elaborated on further below.

Incompatibility with statutory liabilities

Insuring clauses in public liability policiesonly cover civil law/tort liabilities. They donot cover the rather different statutoryenvironmental liabilities. This was veryclearly demonstrated in the 2006 case (seebox 4) of Bartoline Limited v Royal & SunAlliance Insurance plc and Heath LambertLimited.

In this case, the court was effectively askedthe following question: are statutoryenvironmental clean up liabilities coveredunder traditional public liability insurancepolicies? The court’s response, based onthe public liability insuring clause at thecentre of the case indemnifying Bartolineagainst legal liability for “damages”, was“no”.

Because the majority of environmentalliability situations that an organisation islikely to encounter will involve statutory,rather than tort, liabilities, the case meansthat companies that only have traditionalpublic liability policies will not be coveredfor the majority of environmental liabilitysituations that they might encounter.

Coverage issues


Box 4: Bartoline v RSA and Heath Lambert: the facts

The water pollution in this case resulted from spilled chemicals and foams used to fight a fire at Bartoline’swarehouse.

Pursuant to the statutory water pollution regime, the Environment Agency took emergency measures toclean up and (as it was entitled to do) sent Bartoline the bill. It also ordered Bartoline to carry out furtherclean up works.

Bartoline claimed its clean up costs (£147,988) and the Environment Agency’s clean up costs bill (£622,681)under its public liability insurance, which indemnified Bartoline against “legal liability for damages in respectof….accidental loss of or damage to property…..nuisance, trespass to land or trespass to goods orinterference with any easement right of air, light, water or way”.

The Mercantile Court in Manchester, hearing the case, decided (on 30 November 2006) that the sumsclaimed did not constitute “damages” and were not therefore covered under this common policy wording.

The case has led many insurers to offer“Bartoline extensions” to their publicliability policies with the aim of includingstatutory liabilities to some extent withinthe policy cover. No accepted standardBartoline extension wording exists. In themain, the various extensions in existenceare helpful, but they do not rectify the gapin cover for statutory liabilities highlightedin the case completely, and they do notclose any of the other coverage problemshighlighted in this section at all.

In particular (and recognising that differentextensions will cover slightly differentthings), the extensions are unlikely to cover:

■ Any liability incurred as a result of‘gradual’ pollution;

■ Statutory liability for remediation of ownsite pollution;

■ Statutory liability for costs of regulatorrelating to own site pollution;

■ Statutory liability for biodiversitydamage; and

■ Statutory liability for dealing withimminent threats of environmentalharm.

Need for “reasonable precautions”, a“claim” against the insured, and “legalliability”

As a precondition to indemnification, apublic liability policy will usually require:

■ Reasonable precautions to have beentaken at the insured’s expense to preventor diminish losses or liability arising inconnection with the insured risks;


■ A formal “claim” to have been madeagainst the insured by a third party; and

■ “Legal liability” on the part of theinsured. Legal liability arises when theinsured and the claimant have agreed tosettlement, or there is a judgment orarbitration award.

In the context of the wider third partyclaims that public liability policies aredesigned to cover, the reasons behindthese requirements are understandable andthe requirements themselves aremanageable.

However, very often in cases involvingenvironmental harm, the sensible approachis for the insured to be proactive and takeearly action to reduce or avoid a liability,loss or claim that is likely, in time, to arise.Where this approach is taken, theserequirements mean that the insured shouldnot expect to be indemnified.

The “Gradual Pollution” Exclusion

Virtually all public liability policies havecontained an express “gradual pollution”exclusion since about 1990. The ABI’smodel exclusion, which the vast majority ofUK public liability policies follow closely, isset out in box 5.

The gradual pollution exclusion means thatof all of the liability claims that fall withinthe scope of the insuring clause (and, to re-emphasise, statutory liability claims do notfall within the insuring clause unless there isa Bartoline extension), the only ones thatwill be indemnified by the insurer are thosecaused by a “sudden, identifiable,unintended and unexpected incident whichtakes place in its entirety at a specific timeand place during the Period of Insurance”.

Demonstrating a causative incident withthe right characteristics could be difficultfor the insured. Not only does the incidenthave to be sudden, identifiable, unintendedand unexpected, it also has to take place inits entirety at a specific time and placeduring the Period of Insurance. The effectof the pollution exclusion is therefore toexclude from cover a great manyenvironmental liability scenarios that fallwithin the insuring clause.

There are three interesting points to noteabout the “gradual pollution” exclusion:

■ In the ABI wording, it is not the pollutionthat has to be “sudden, identifiable,unintended and unexpected”. It is theincident that caused it. Liabilitiesstemming from gradual pollution are notexcluded where the pollution is causedby the right type of incident (i.e. sudden,identifiable, etc).

■ The word “incident” is not defined in thiscontext.

■ When it was introduced, insurers werekeen to emphasise that the exclusionwas not materially changing the coverafforded by a public liability policy. Theirview at the time was that gradualpollution liabilities were not covered bypublic liability policies and the expressexclusion merely spelled this out. Thus, itis not necessarily true to say (as iscommonly done) that all pollutionliabilities falling within the scope of theinsuring clause (including gradualpollution liabilities) were covered untilthe express exclusion was introduced.

Owned property exclusion

Public liability policies provide cover forclaims by third parties against the insured.They do not cover a claim by the insuredfor damage to its own property. This isbecause the insured has no legal liability intort for such damage. Policies usuallycontain an exclusion which bars cover fordamage to property which is owned oroccupied by, or is in the care, custody orcontrol of, the insured. Many policies nowextend cover to include damage to anypremises leased or rented by the insuredbut such cover would typically only applyto pollution damage to the premisesthemselves and would exclude anycontractual liability.

If the insured incurs costs in remediatingcontamination on its own site (a veryplausible scenario following anenvironmental incident), the ownedproperty exclusion will very likely operateto deny cover for such costs – possiblyeven where the remediation is intended todiminish off-site risks.


Box 5 : ABI Pollution Exclusion

A. This policy excludes all liability in respect of Pollution or Contamination other than that caused by asudden, identifiable, unintended and unexpected incident which takes place in its entirety at a specifictime and place during the Period of Insurance.

All Pollution or Contamination which arises out of one incident shall be deemed to have occurred atthe time such incident takes place.

B. The liability of the Company for all compensation payable in respect of all Pollution or Contaminationwhich is deemed to have occurred during the Period of Insurance shall not exceed [£____] in theaggregate.

C. For the purpose of this Endorsement “Pollution or Contamination” shall be deemed to mean:

(i) “all pollution or contamination of buildings or other structures or of water or land or theatmosphere; and

(ii) all loss or damage or injury directly or indirectly caused by such pollution or contamination.”


Cover - other policies

D&O

Traditionally, D&O policies have containedan absolute pollution exclusion, with theresult that they do not indemnify directorsor officers in respect of liabilities stemmingfrom most forms of environmental harm.

It is fair to say that since the mid 1990s,some D&O policies applied a sub limit ofindemnity for costs incurred by the insuredin defending criminal or civil environment-related claims. It is also fair to say that someinsurers are reviewing their stance in relationto the absolute pollution exclusion. Theposition is not clear cut or uniform, however.

Property

Property policies, which provide cover for lossesresulting from damage to property which isowned or occupied by an insured, cannot berelied upon to provide comprehensive cover forenvironmental liabilities.

■ First, a property policy provides coveronly in respect of specific buildings andnot as a general rule land. Thus, when achemical escapes and damages aninsured building, there might be cover.However, when it enters the soil whichthen has to be cleaned up, a propertypolicy will invariably not respond, evenwhen the area of contaminated soil isconfined to the area underneath theinsured building.

■ Second, since the early 1990s, mostproperty policies have included aqualified or absolute pollution exclusion.

■ Third, the cover for “debris removal” inmost property policies is of limited value.The debris in question usually has tocome from the insured property and isinvariably expected to be solid in nature.

Employers’ liability

These policies will provide cover to aninsured in respect of a claim by anemployee who has suffered injury ordisease as a result of exposure to adangerous substance.

However, there is no cover for anythingother than claims made by employees.There is no cover in respect of any form ofremediation or property damage.

Motor

Motor policies cover the driver’s liability tothird parties (including passengers) forpersonal injury and property damagearising out of use of a vehicle. They can alsocover injury to the driver and damage tohis/her property.

Essentially, the liability section of motorpolicies are structured in the same way aspublic liability policies, with the result that,although the sudden, identifiable, unintendedand unexpected incident requirement forpollution incidents would not generally causea problem in relation to motor accidents, theextent of cover is limited.


It will be clear from the last section thatwhen it comes to environmental liabilityrisks, standard or traditional policies fallshort of providing comprehensive cover.

Insureds need to appreciate the extent ofthe gap between the environmentalliabilities that they might incur, and thecover that they have.

Environmental insurance products areavailable in the market to help fill the gap.They are worded so as to provide far morecomprehensive coverage of environmentalliabilities than the more standard policies.

The key points relating to environmentalinsurance policies are that:

■ Most cover statutory liabilities as well astort liabilities arising out ofenvironmental harm;

■ In covering statutory liabilities, theycover the full range of investigation andremediation that can be ordered, inparticular the complementary andcompensatory remediation that can beordered under the new EnvironmentalDamage regime implemented pursuantto the EC Environmental LiabilityDirective;

■ They cover liability for environmentalharm, even where the harm has notarisen as a result of pollution orcontamination (e.g. where the harmresults from a fire or a flood);

■ They cover liabilities resulting fromgradual pollution as well as liabilitiesresulting from pollution caused by asudden incident (as long as the relevantrelease and/or harm post dates aretroactive date which is clearly set outin the policy); and

■ They are very likely to provide cover inthe very common situation where aninsured sensibly takes action in respectof environmental harm before a formalclaim is made and before legal liability isofficially established.

Depending on the precise environmentalpolicy purchased, there is cover forstatutory and tort liabilities that arise fromenvironmental harm that is:

■ On the insured’s site; and/or

■ Off the insured’s site.

Cover can also be arranged for liabilityarising out of historical contamination atspecific sites (whether currently owned orpreviously sold), liability for environmentalharm arising from products, and liabilityassociated with installation, repair andservicing work at third party premises.

Environmental Insurance


Notes


With thanks to

Roger Nash Faraday

Tony Lennon Chubb Insurance Company of Europe SE

Marcus Drew Liberty International Underwriters

David James Allianz Global Corporate & Specialty

Martin Müller Munich Reinsurance Company

Doug Murray Transatlantic Re

Ian Watson Swiss Re

Neville White Tokio Marine Europe Limited

Simon White XL Insurance Company Limited

Elliot Dibble Assicurazioni Generali S.p.A

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