11 March 2021

Time to protect your business from environmental damage claims

Taking care of the environment and reducing pollution has, in recent decades become a high priority global topic.

National and International laws have been developed so that individuals and companies can be prosecuted for causing damage to the environment. Yet many remain unaware of the impact even the smallest accident could have, not just to the environment, but to the polluter themselves financially.

Having Environmental Liability Insurance will help put your mind at ease. The case study below from a Motor trader demonstrates just how important an environmental liability policy can be.

Motor Trade – Car Sales Showroom

A Motor Trader had a heating oil tank attached to the garage and car showroom. This developed a leak in the underground pipe. 

Over a period of time the oil seeped from the tanks into the surrounding soil and groundwater, contaminating both the car dealer’s land and neighbouring business. The extent of the contamination was not realised until oil was noted in a nearby watercourse.

Luckily the site owner had purchased an Environmental Pollution Liability policy. The cover gave an incident limit of £1 million and policy aggregate limit of £5 million with an excess £20,000. The policy had been purchased on an annual basis for 4 years, thereby providing retroactive cover for the same period.

Investigations were undertaken and followed up by a contaminated soil and groundwater treatment programme in order to mitigate the insured’s liability with respect to the regulator and the adjacent property owner.

The insured’s policy provided coverage for third-party property damage claims, investigation and remedial site activities, legal defence costs, expenses and business interruption.

 The remedial action by the insurers helped to mitigate the insured’s liability and damages.

The swift installation of a remedial system served to reduce the insured’s liability. The policy responded to first and third-party impacts resulting from gradual pollution conditions, which would not have been picked up under other liability policies in place. The legal fees alone exceeded £85,000.

For more detailed information on Environmental Liability Insurance please contact us or call 01270 758070 where one of our advisors will arrange a free no-obligation review of your specific requirements.

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