Environmental insurance—when is it needed?
Produced in partnership with Argyll Environmental Ltd
Environmental insurance—when is it needed?

The following Environment guidance note Produced in partnership with Argyll Environmental Ltd provides comprehensive and up to date legal information covering:

  • Environmental insurance—when is it needed?
  • Brexit impact
  • What is environmental insurance?
  • Role of insurance
  • Key Legislation
  • Benefits of environmental insurance
  • Scope of environmental insurance
  • When to use environmental insurance
  • Obtaining environmental insurance

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.

What is environmental insurance?

Environmental insurance is a risk transfer solution to indemnify the insured against losses arising as a result of potential environmental liabilities. The insured for property based coverage can be the buyer or seller of a property, or often both.

A separate environmental insurance policy is often required because public liability insurance typically excludes environmental liabilities with the exception of sudden, unintended and unexpected pollution incidents.

In addition, public liability insurance will only provide cover for third party damages, and not for the remediation of the property of the insured.

Insurance policies are available to provide cover for a variety of potential losses arising from environmental liabilities including:

  1. on-site remediation

  2. off-site remediation

  3. civil disputes, and

  4. legal expenses

Role of insurance

Obtaining insurance may enable transactions or developments to proceed where there are environmental risks and liabilities as it provides financial security and removes uncertainty. It