You’re a conscientious business owner who does as much for the environment as possible. You recycle, use public transport, and use energy saving light bulbs.
But are you sure that your septic tank isn’t leaking into the water courses in the area? Do you know if your hazardous waste is being disposed of correctly? Are you putting the environment at risk? How can you assess these exposures and potentially transfer the financial impact?
As we all become more environmentally aware and we feel obliged to offset the damages we may cause to the planet, regulations are becoming stricter. The Environmental Damage (Prevention and Remediation) Regulations 2009 make business owners financially liable in the event of pollution.
In this article I will answer some key questions on Environmental Impairment Liability to help you decide whether your business may need to discuss some solutions.
What is Environmental Impairment Liability?
www.aquasan.biz defines “environmental liability” as:
“The legal obligation to clean up environmentally damaged or polluted surroundings.”
What is Environmental Damage?
www.legislation.gov.uk defines “environmental damage” as damage to:
- protected species or natural habitats, or a site of special scientific interest
- surface water or groundwater
Is my current insurance policy protecting me?
Most companies may not be aware of the risks they pose to the environment and the liability they have towards it. Most may also not be aware that their Public Liability policy does not cover them in the event of damage to the environment.
A Public Liability policy only covers sudden events that lead to damage – not an ongoing problem such as a gradual seepage. It also doesn’t cover your own clean-up costs or business interruption.
What has happened in past Environmental Impairment Liability Cases?
The case of Bartoline Limited v Royal and Sun Alliance (2006) saw a fire break out in an adhesive manufacturing and hydrocarbon packing factory. These chemicals leaked into the local water courses.
The total of the emergency cleanup was in excess of £600,000, which The Environmental Agency billed to Bartoline Limited. Their insurers refused to pay out following the claim by Bartoline, stating that “damages” as defined in their Public Liability policy did not include the cost of the clean-up, and so Bartoline were left to pay the bill.
Does this apply to my business?
There are many difference types of company that could benefit from an Environmental
Impairment Liability policy, however a few example are:
- Property developers
- Building Contractors
- Waste treatment/storage/disposal contractors
- Distributors and Hauliers