It’s the elephant in the factory; we all know that what we do and what we manufacture is a necessary and cost-effective solution for our clients. However, growing external pressures from governments, NGOs, and more and more from citizen bodies to reduce the impact of manufacturing and plastic waste on the environment mean our industry is under the microscope. In this blog, we explore the growing pressures on the manufacturing industry regarding environmental responsibility and the role of Environmental Liability Insurance in protecting businesses from financial and reputational risks.
What was once (or still is) acceptable practice can easily become tomorrow’s class action. Remember back to the issue of CFCs and the pressure on white good manufacturers to take back old refrigerator units and take ownership of the safe removal of the gases; a cost never factored into the original sales model. And, now in the USA, multiple litigation cases, where major food brands are being sued because their retail packaging is ending up in rivers and the water system, ultimately, the company is being held responsible for the actions of its customers. (*Source)
And, behind the headlines, accidents happen… even a small chemical spill or waste-handling error can lead to costly clean-up, regulatory fines, legal claims, and lasting reputational damage. Unfortunately, many standard business policies don’t provide the right protection.
What is Environmental Liability Insurance (ELI)?
ELI pays for the clean-up costs, remediation costs, and legal defence following a pollution or environmental damage incident.
Although it doesn’t cover fines, it can cover third-party costs for damage to neighbouring land, and potentially compensation for any loss of business suffered as a result.
Do I need Environmental Liability insurance?
Although ELI is not a legal requirement, there are several reasons why businesses would benefit from taking out cover. The most obvious is the financial protection afforded should your business cause environmental damage to the natural environment or third-party property.
What does ELI cover?
It provides cover for a range of issues, including:
- Soil, air, and water pollution
- Offensive odour
- Oil storage pollution
- Noise pollution
- Damage to natural resources
- Fly-tipping on your property
- Third-party damage
In the event of a pollution incident, ELI will pay:
- Environmental clean-up of your own and third-party land
- Investigation and legal defence
- The reversal of damage to biodiversity
- Compensation for third-party bodily injury or loss of business
- Business interruption if your operations need to stop
- Emergency costs incurred responding to pollution or environmental damage
ELI will cover your past or current operations or for any where you retain a legal liability.
Won’t our public liability insurance cover environmental damage?
Before the introduction of ‘polluter pays’ legislation, pollution clean-up and ineffective waste disposal that damaged third-party property were typically covered under public liability insurance.
However, with the introduction of strict liability for all pollution, insurers applied a standard exclusion of gradual pollution in most public liability policies. A sudden, one-off pollution incident, such as a burst oil tank that damages a third-party property, would normally still be covered under public liability insurance, but any gradual pollution that happens over a period of time would not. Public liability would also not cover the cost of cleaning up and restoring publicly owned land or waterways.
Click Here to Download Our Environmental Advice & Incident Checklist
How to Get Involved
- Request a free, no-obligation quote, and PlastikCity Insurance will donate £25 to The Air Ambulance Service.
- Rest assured knowing your insurance needs are handled by a specialist broker.
- Visit plastikcityinsurance.co.uk to learn more and see the growing donation total.
*PlastikCity Insurance’s policies are arranged and administered by PHL Insurance Brokers Limited
