Environmental liability insurance also referred to as, pollution insurance, covers certain enterprises from environmental hazards. It assists in defraying the expense of cleaning and legal liability for pollutants. It covers losses or damages brought on by unintentional discharges of pollutants, which are normally not covered by property and general liability insurance.
In addition, it is sometimes referred to as pollution insurance or pollution coverage. Generally, claims for property damage, business disruption, bodily injury, and cleaning expenses are common ways that environmental insurance covers losses or damages.
There is very little exclusion to the general liability and property insurance plans that cover most damages related to pollution. This includes smoke from an uncontrolled fire or fumes from a malfunctioning heating or air conditioning system.
Why Do Small Businesses Need Environmental Liability Insurance
Environmental risks can originate from a variety of sources and impact companies operating in nearly every industry. If a business, organization, or person causes a pollution that harms people, property, or the environment itself, they may be held legally liable for any pollution damage under both federal and state laws.
Moreover, the extent of the contamination may require you to pay for costly cleanup and engage environmental professionals. Furthermore, Environmental liability insurance might be useful if your clients, employees, or neighbors get sick or sue you.
What Does Environmental Liability Insurance Cover
Damage from an environmental accident is covered by environmental liability insurance, including:
Bodily injuries
Environmental liability insurance can assist in covering the costs of medical care for a non-employee who becomes ill or injured due to pollutants that your company unintentionally releases. If the person sues your company for damages it caused, it also pays for legal fees.
Property damage
If an accident occurs and pollution from your business destroys or damages someone else’s property, your firm’s environmental insurance coverage may pay for the damages.
Costs associated with cleaning up pollution
If you break any state or federal laws protecting the environment, environmental insurance can help with the expenses of cleaning or rehabilitation.
Interruptions to business
Business interruption coverage is included with pollution liability insurance. This covers your company if an environmental mishap forces a temporary closure. However, whether or not this coverage is included will depend on your industry’s risks and geographic location.
What Does Environmental Liability Insurance Not Cover
While certain business-related accidents may result in damage to the environment, they are protected by insurance other than environmental responsibility. The following are excluded from environmental coverage:
Harm from smoke and fire
Your general liability insurance would cover a customer’s property damage if your business started a fire. Moreover, a business owner’s policy (BOP) or commercial property insurance would cover any damage to your company property. A BOP offers a lower rate by combining business property insurance and general liability coverage into a single policy.
Dangerous goods
Your business would require coverage from a product liability insurance policy if any poisonous or hazardous ingredients were discovered in goods produced or distributed by it.
Workplace sickness and injuries
Employee medical costs would be paid for by workers’ compensation insurance if an employee is harmed or falls ill as a result of exposure to a work-related contaminant, such as asbestos at a building site. Should the worker file a lawsuit due to the injuries, it would also pay your legal expenses.
How Much Does Environmental Liability Insurance Cost
Environmental insurance costs $223 a month on average, or $2,675 per year, according to median estimates of policies sold. The following variables affect how much environmental insurance costs:
- Industry Hazards
- Your region
- The number of workers
- Payroll each year
Do I Need Environmental Liability Insurance
As a company, you will encounter a variety of situations where your operations could harm the environment. For instance, harm brought on by:
- The present land use of your property or the site’s previous use
- An issue with one of your property’s storage tanks, such as an oil tank
- A product that your company ships, like insecticides
- Fire on your land, such as when you decompose green garbage
- Badly functioning drains resulting in oil spillage into the water supply, such as in a parking lot
- Dust from building projects
Furthermore, the potential expenses of repairing the harm caused have grown dramatically due to new UK and EU regulations. Environmental concerns must be promptly addressed to save your company’s reputation.
FAQs
Is Environmental Liability Insurance the same as pollution liability insurance?
Yes, both environmental liability insurance and pollution liability insurance relate to the same kind of insurance coverage. Moreover, different terminology is used in different sectors for the same kind of coverage.
Can I include coverage for an Environmental Policy?
Yes. Many bigger businesses that own or rent their office might include premises pollution coverage as an endorsement of their environmental insurance policy. Premises pollution liability (PPL) coverage can cover spills and leaks that occur on the property that are contaminated by pollutants from the property.
