Environmental Insurance coverage started in the U.S. resulting from the introduction of strict environmental legislation by the U.S. government. The legislation was strictly enforced and environmental claims began to occur. Insurers considered there was a niche market available to provide protection against environmental claims. Environmental insurance is now available in many other countries, but none so much as in the U.S. where a specialist environmental insurance market has developed.

As the market has developed, so has the spectrum of companies that this type of insurance is marketed too. In addition to offering it to specialist niche markets, environmental insurance is also targeted at regular businesses.

The concept of environmental insurance is to provide financial security to companies that may face liability claims over environmental issues. Although some regular liability policies do provide limited environmental cover they may not provide protection against associated issues such as pollution.

Environmental insurance is necessary for every company that has a potential involvement with the environment; the oil industry is a typical example, but it equally applies to landfill site operators.

In general terms an environmental insurance policy provides coverage against liabilities arising from property damage, bodily injury and pollution damage. Cover is generally stated as being sudden, accidental or gradual incidents.

A typical policy will also provide the following benefits:

– The cost of clean-up as required by the relevant legislation, irrespective of whether it is on a company’s own premises or elsewhere.

– Access to an emergency fund, so that money is available immediately to prevent spread of the pollution and to prevent injury or harm to people.

– Directors and certain key employees are provided with full indemnity cover.

Optional extras can also be included if desired such as:

– guaranteed renewal

– existing or historical pollution incidents

– extended claims period following policy termination

– coverage for cargo transportation.

On first thoughts, the requirement for environmental insurance would appear to be limited to those companies or operations with obvious exposure to environmental issues. These may include:

– oil producers, refineries, suppliers and distributors

– Airport and airline operators

– Energy supply operators or water treatment and sewage operators

However, environmental insurance is also purchased by companies and organisations such as:

– property developers

– colleges, universities and other educational facilities

– manufacturing companies

Consider the following advantages to purchasing environmental insurance:

– Removes uncertainties and strengthens the financial position of a company.

– Enables the merger and acquisitions of companies to proceed that may not have been possible without the insurance coverage.

– Premium rates are beginning to fall, due to increased competition in the market and the increase in insured companies.

– Policies can be written to include pending or proposed new environmental legislation.

However, while the advantages probably out way the disadvantages, there are a few disadvantages to take account of, just to balance the argument.

– Compared to other types of liability insurance, environmental insurance is still more expensive.

– Policy terms are generally limited, so there is no guarantee of renewal.

– Exclusion may apply relating to existing issues

– It can take some time to get the insurance in place, due investigative work by the insurer.

Find out more about Environmental Consulting Insurance here and how Beacon Hill Associates can help you.

Find out more about Environmental Consulting Insurance http://www.b-h-a.com/packaged-coverages-contractors-consultants and how Beacon Hill Associates can help you http://www.b-h-a.com/Home.aspx.

Author Bio: Find out more about Environmental Consulting Insurance here and how Beacon Hill Associates can help you.

Category: Business Management
Keywords: Environment, Insurance, Business