What is environmental liability insurance?
Environmental liability is unlimited and requires the polluting company to restore the damaged natural resources to their original state.
Objective of the insurance
The main objective of environmental liability insurance is to prevent, avoid and repair damage caused by companies to the natural resources of the environment.
Also in Spain there is a mandatory legal system which is based on the “polluter pays and also repairs” principles of prevention: The 2017 order classifies activities into three priority groups and sets a deadline for each of them to take out a mandatory financial guarantee that can be transferred to an environmental insurance policy.
In order to establish the company’s risk and the capital to be insured, it is necessary to carry out an environmental risk analysis that determines whether the company is liable.
How do we work environmental liability insurances?
Before taking out the policy, the O. Brokers team analyses the company’s activity and whether it is subject to the mandatory regulations in force. If so, we indicate the urgent need to carry out an analysis of environmental risk that determines the company’s responsibility and the amount to be established in the financial guarantee for the subsequent contracting of the environmental liability policy .
In the event that the company is not subject to the mandatory regulations in force, we study in which situations the company could pollute according to its characteristics and installations and we also recommend the contracting of the environmental liability policy, as the company could receive a claim for a polluting event even if it is not mandatory under the regulations.
We proactively consult the latest environmental regulations to ensure that our customers are compliant with the latest changes.
We inform clients of the steps to be taken to establish a financial guarantee transferred to insurance in order to mitigate the risk of the business and ensure its continuity.
- Environmental liability
- Cost of prevention and avoidance expenses
- Cleaning costs, primary repair costs in and outside the insured risk situation
- Pollution liability
- Goods transport
- Crisis management expenses
- Liability for damage caused by underground tanks
What can happen to trigger environmental liability insurance?
- A company whose factory is located near the river manufactures cleaning products with toxic components and a toxic spill leaks into the water.
- The loud noise of factory machinery causes the migration of certain birds in the area.
- A company has underground tanks of some noxious product with a leakage of the liquid that progressively seeps into the ground. After a few years, it is discovered that all the soil in the area is contaminated.
- The burning of a plant also causes the burning of the surrounding forest.
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