The environment is a hot topic with companies recognising that consumers want to deal with ‘Green Companies.’ Interest like this gives rise to stories, facts and figures being quoted, some of which are misleading. So let’s have a look at one or two that are doing the rounds.
Pollution cases are very rare
False – In fact pollution cases are on the rise. Companies that are liable for pollution incidents often incur fines and, most importantly, clean-up costs.
A Scunthorpe based company recently faced a fine and clean up costs of £28,300 after leaking oil into a near by beck.
Fines are not covered by insurance and are very small
True, BUT – Although in some cases fines may be small; clean-up costs are often very large. For example a chemical company had a large fire which destroyed their premises. During the course of the firefighting, water used to dampen the flames became contaminated and entered a nearby river. The Environmental Agency undertook emergency work and claimed costs from the chemical company, who were also required to undertake additional remedial works on another river. The total costs were in the region of £800,000 and they had a public liability policy, but when a claim was put in to their insurers it was denied. Had the clients taken out an environmental liability policy, their Clean-up costs of £1,000,000 would have been covered.
Pollution has to occur for a company to be liable for environmental damage?
False – Under the European Environmental Directive businesses can be liable for environmental damage even where there hasn’t been any pollution. An example of this was a contractor who was clearing a ditch which resulted in an area of wetland drying out, damaging plants and wildlife. The costs associated with reintroducing the area and habitat were in the tens of thousands.
Innocent until proven guilty?
Absolutely False – Not when it comes to environmental incidents when the burden of proof lies with the accused.
According to the European Environmental Liability Directive, and enforced by the Environmental Regulator, if an incident occurs the Regulator will decide who they think is to blame and the accused will have to prove otherwise. It’s often assumed that the nearest, or most obvious, candidate has caused the damage.
And the solution…
…..a comprehensive environmental liability policy.
Environmental insurance can seem complex and are regularly publicised as being hugely costly. The simple fact of the matter is that as this subject rises higher and higher up the corporate agenda, it is vital that companies are explicitly aware of the risks their operations pose and the financial exposure they face should something go wrong, no matter how remote the possibility.
If you need more information regarding environmental exposures please contact us and find out how we can free you to do what you do best.
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