Environmental insurance is a type of insurance that is designed to help claim for damage or loss resulting from unanticipated releases of pollutants. The damages or losses that result are often property damage, cleanup costs, business interruption, or injuries. Often, people think that they have environmental insurance as part of their policies, but most insurance excludes coverage for pollutants. This article will discuss 5 knowledgeable facts about environmental insurance.Environmental insurance is a type of insurance that is designed to help claim for damage or loss resulting from unanticipated releases of pollutants. The damages or losses that result are often property damage, cleanup costs, business interruption, or injuries. Often, people think that they have environmental insurance as part of their policies, but most insurance excludes coverage for pollutants. This article will discuss 5 knowledgeable facts about environmental insurance.
Environmental Insurance (aka: environmental impairment liability (EIL)) was introduced back in 1978. Ever since, it has been constantly evolving and offers over one hundred different insurance policy forms today. A market capacity of over $200 million dollars is available for a single risk. Coverage provided by environmental insurance policies vary greatly between each as there are no standards for these coverages offered.
2. Coverages in Environmental Insurance Policy
An insurance policy should outline all coverages for losses or damages that occur as a result of pollutants. Most commonly, an environmental insurance policy will cover:
Damages and losses that are sudden, accidental, or gradual that result from:
• Property Damage
• Clean up Costs
• Business Interruptions
Alternatively, there are some optional insurance coverages that can be included. Some of these include:
• Extra expenses
• Reputational damage
• Fungi/bacteria pollutants
• Clean up costs
3. Environmental Insurance Policy Forms
There are different environmental insurance policy forms all in which serve a different purpose. The three basic environmental insurance policies are:
Contractors LiabilityCoverage for pollution incidents that occur as a result from the operations of those insured as part of the policy.
Professional LiabilityUsually professional liability for these damaged is provided under a professional liability policy.
Environmental LiabilityIs specific for locations included. These include prior knowledge of pollution conditions at the locations.
4. Common Coverage Errors
Often times there are many errors made when purchasing environmental insurance. Below are some of the common mistakes outlined:
• Failure to include the full effects of pollution within the design of the insurance policy.
• Error in purchasing a policy form that is not for the intended purpose.
• Failure to address pre-existing pollution issues on the environmental insurance policies.
• An underestimation of the effects of pollution exclusions in the policy form.
• A very common problem made by insurance agents is leaving out the part that their customers are ensured for contamination losses.
5. How to Fix the Coverage Errors
There are some things that can be done to prevent these errors from occurring in the insurance coverage. They include:• Make sure that the insurance brokers address the risks to their customer’s. It is important to be informed on the exclusions that can be offered and are available.• Most of what was taught in the past about pollution exclusions was not accurate. There are organizations that help answer questions and give out accurate information.
Environmental insurance is very important to be aware of. It can help you in any instance where this may be an issue. It’s important to keep these 5 important facts about environmental insurance available to help you out when purchasing an environmental insurance policy.