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Business face liability for environmental damage

The Environmental Liability Directive was transposed in England in March 2009 and as a result businesses now face new Environmental exposures.

Biodiversity Damage
The new regulations make businesses responsible for the consequences of damaging protected species and their natural habitats, streams, rivers and thousands of designated natural areas.  The environmental authorities can now demand that a company act and force them to clean up.pollution caused in order to restore the environment to its original condition. In an emergency they can even do emergency work themselves and recover the costs from the company later.  Worse still if it’s not possible to restore the area to its pre incident condition, the company could be made to provide a similar level of natural resources at an alternative site, as well as providing ‘compensatory’ remediation at the original or alternative site for the interim losses the environment has suffered.

Gradual Pollution
Pollution damage caused by a major event such as a stricken oil tanker or exploding oil depot is rare but obvious, whereas gradual pollution can go undetected for a long time before the effects are discovered.   For example repeated spillages from routine operations, minor leakages that seep into the ground over a long period, or leaking of underground storage tanks and pipes can all be hard to notice at first. On the other hand damage to the environment caused by the pollution of streams, rivers or other water bodies is usually visible quite quickly.

Air pollution is another form of pollution that can, over time, damage the business’s own premises as well causing injury and damage to its neighbours and their property, resulting in the company potentially having to suspend its operations to allow a clean-up.

On Site Clean Up Costs
The clean-up costs associated with pollution damage can be  scary and may include; investigating the cause and the source of the contamination, sampling on the surface and deep down into the water table, scientific analysis, even designing the plans to clean-up the contamination. All that’s before you take into account the extensive costs of restoring the site, the costs of environmental assessment and continually monitoring the land well into the future.

You may be under the impression that your liability insurance will protect you in these circumstances but businesses need to know that gradual pollution isn’t covered by general liability insurance – indeed you need a specific environmental policy for that. An environmental policy covers the pollution clean-up costs, together with any defence, assessment and loss mitigation costs.  Time will tell but don’t be surprised if how a company protects themselves against damaging the environment becomes as important as their Health and Safety procedures.

For further information, please contact Simon Whittaker at Sagar Insurances  This email address is being protected from spambots. You need JavaScript enabled to view it.">This email address is being protected from spambots. You need JavaScript enabled to view it.,  01254 770828, www.sagarinsurances.co.uk