Environmental insurance—extent of coverage
Produced in partnership with Duncan Spencer of EDIA Ltd
Environmental insurance—extent of coverage

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

  • Environmental insurance—extent of coverage
  • Brexit impact
  • Why is environmental insurance relevant?
  • Types of environmental insurance
  • Environmental insurance for property
  • Environmental insurance for businesses
  • Environmental insurance for contractors
  • Extent of insurance for a property transfer policy
  • Extent of insurance for an operational or business risks policy
  • Extent of insurance for a contractors' risk policy

Brexit impact

As of exit day (31 January 2020) the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law. This has an impact on this content.

For further guidance, see Practice Note: Brexit—impact on environmental law and News Analysis: Brexit Bulletin—key updates, research tips and resources.

Why is environmental insurance relevant?

Environmental insurance is designed to provide protection to the insured from pollution or environmental damage.

Standard Public Liability (PL) insurance already provides some cover, but is limited to ‘sudden and accidental’ events only. The difficulty arises because:

  1. pollution occurs all the time, often gradually and on purpose (for example the discharge of pollution down a drain); and

  2. as held in the Bartoline case, PL policies covering ‘damages’ do not encompass liabilities for the cost of remediation imposed under statutory remediation notices

As a result, the most significant pollution liabilities are not insured by standard insurance products, but can be covered using specialist environmental insurance products.

For more on when environmental insurance is needed and the advantages and disadvantages of using it, please see Practice Notes:

  1. Environmental insurance—when is it needed?

  2. Environmental insurance—advantages and disadvantages

Types of environmental insurance

The three main types of environmental polic