Environmental insurance only all-round insurance for environmental damage
Environmental legislation is strict. This ensures that companies become aware of the risk and invest in environmental security measures. If environmental damage does occur, the ‘polluter pays’-principle will apply. The person who causes the pollution must pay the repair costs and these can be very high. In the case of soil pollution, the soil must be cleaned up, the damage to third parties must be repaired and compensation measures must be taken.
The problem is that many of these costs are not covered by other insurances. Fire insurance does provide a small cover for clean-up costs, but does not include clean-up costs for land, water pollution or natural habitat. In the operating civil liability insurance a small part of accidental environmental damage has been covered for damage to third parties. Environmental damage on your own site or damage to biodiversity is thus not covered by your BA property insurance.
Conclusion: for damage on your own site (accidental or gradual) neither the fire insurance nor the operating civil liability insurance intervenes. For this kind of damage there is the environmental insurance.
Underwriting an environmental insurance is not compulsory in Belgium, but it is highly recommended. Environmental damage insurance covers you for pollution of your own site, both accidental and gradual; liability for environmental damage to third parties; defence costs; clean-up costs and damage to biodiversity. If your company faces a particular environmental risk, you can include specific extensions in your policy.
Would you like more information? Contact ADD's expert on environmental risks, Paul Caekebeke.