Environmental insurance—businesses — 2022
Produced in partnership with Duncan Spencer of EDIA Ltd
Last updated on 09/08/2022

The following Environment practice note produced in partnership with Duncan Spencer of EDIA Ltd provides comprehensive and up to date legal information covering:

  • Environmental insurance—businesses
  • Gaps in public liability policies
  • Cover
  • What is not covered?
  • Selection of the policy
  • High risk and low risk activities
  • Policy term and premium
  • Information requirements

Environmental insurance—businesses

Environmental insurance is used to manage environmental risks, both for operational businesses and in many transactions and development projects.

For more on environmental insurance generally, please see Practice Notes:

  1. Environmental insurance—when is it needed?

  2. Environmental insurance—extent of coverage

  3. Environmental insurance—types

  4. Environmental insurance—advantages and disadvantages

Gaps in public liability policies

Standard insurance, such as public liability policies, do not provide adequate protection from environmental liabilities for businesses. This is because:

  1. cover is limited to 'sudden and accidental' releases only

  2. licensed discharges are not considered 'accidental'

  3. wear and tear is not considered 'sudden'—even if the pollution release was sudden

  4. although certain liability under the Environmental Liability Directive (ELD) and implementing regulations may be covered, some damage to fauna and flora would be excluded, and

  5. requests for remediation by statutory bodies are not considered to be a third party liability (for which there would be coverage), as no owned property has been damaged

The environmental insurance market therefore provides products that fill these gaps—focused on operational liabilities. These can be useful for a businesses risk management strategy, satisfying requirements for financial security against operational liabilities.


The operational risks policy offers cover for losses that arise during the policy period from a pollution incident:

  1. at the

Related documents:
Key definition:
Coverage definition
What does Coverage mean?

Refers to the range of a mobile cellular network, measured in terms of geographic coverage (the percentage of the territorial area covered by mobile cellular) or population coverage (the percentage of the population within range of a mobile cellular network).

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