Environmental
We advocate early engagement in every policy to provide upfront, honest, and practical advice.
Environmental issues are not typically covered under Warranty & Indemnity (W&I) insurance and therefore environmental policies bridge the gap between Public Liability, Property, and W&I policies, specifically addressing pollution and environmental damage concerns.
Why do I need Environmental Insurance?
If your business faces legal liability, rectifying damages can be costly and pose risks to reputation. Resolving environmental issues swiftly and sensitively is crucial, and Environmental Liability cover can assist in addressing and rectifying any damage caused.
A separate environmental insurance policy is often required because public liability insurance typically excludes environmental liabilities, except for sudden, unintended, and unexpected pollution incidents.
Environmental Insurance Solutions we provide
Our coverage includes specific exclusions for known conditions, determined by the level of site characterisation and specific requirements from regulatory authorities. Typically, environmental policies will exclude fines and penalties, loss arising from a change of use, and, increasingly, PFAS contamination. We aim to remove exclusions or other qualifications of cover wherever feasible.
Key benefits
Our Environmental insurance is designed to mitigate the risks associated with pollution events and contaminated land, whether known or unknown, within the insurance market. It is relevant for buyers, sellers, targets (and other entities in non-M&A scenarios), providing financial security for losses stemming from breaches of environmental representations and warranties. This includes remediation costs and legal liabilities, such as refunds for clean-up expenses and claims for loss of business due to site operation limitations.
Environmental FAQ’s
Costs, typically within a 0.4 – 3% range (increasing to 6% for sizable environmental exposures), depend on factors like the number and jurisdiction of insured locations, policy limit size, nature of underlying operations, underlying risk, and known contamination levels. Premiums are higher for known pollution conditions. Insurance premium tax and underwriting fees are additional charges.
A common policy period is 10 years for operational sites, but it may extend to 15 years depending on the risk extent, especially when specifically insuring an environmental indemnity.
The following information is valuable: Phase 1/Phase 2 Environmental Reports, Remediation Action Plan or Validation Report, Vendor/Buyer Due Diligence Assessments, Internal Environmental Self-Assessments, Environmental Audits, correspondence with relevant environmental regulators, and access to a virtual data room if possible.