Environmental impairment liability insurance (EIL) provides cover for the legal, clean-up, and reinstatement costs following a pollution 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.
EIL insurance provides protection for a range of environmental impacts:
Environmental Impairment Insurance is often included in a standard farm insurance policy, but it is not a unique risk to farms. Any business that stores or uses potential pollutants should consider maintaining EIL cover.
Alan Boswell Group are experts in EIL insurance, helping you understand your exposures and providing the right cover to offer you the most appropriate protection.
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Since changes to the Environmental Protection Act in 1990, any damage caused to the environment is the liability of the polluter. This is the ‘polluter pays‘ principle. Where multiple parties are involved in a project, every party has a duty of care to ensure that their business activities do not cause environmental damage.
And, while public liability insurance still covers for pollution caused by a sudden, identifiable, unintended, and unexpected incident, this can leave you unwittingly exposed as environmental damage can often happen gradually over a period of weeks, months, or even years.
Environmental impairment liability insurance (EIL) is designed to cover the cost of any clean up and / or third-party claims and includes:
EIL insurance is the most comprehensive policy available for businesses to protect themselves against the cost of claims for pollution.
Environmental liability insurance is not a legal requirement but does provide peace of mind if you operate a business in an industry that is at high risk of causing contamination or pollution. Some insurers will include EIL as part of a farm insurance policy for businesses working in the agriculture sector.
As with most insurances there is no legal requirement to hold EIL cover and people can choose to self-insure. However, land owners and businesses are liable for flora and fauna damage in the event of a pollution incident. If cover is not in place the Environment Agency will use their statutory powers to clean up and will charge the landowner under the ‘polluter pays’ principle.
Environmental impairment liability insurance is designed to cover the clean up costs of your land but not the property and this will usually be covered under your buildings insurance or farm policy. Third-party property and land is covered.
Any previous pollution will be excluded. However, if it has been cleared away by professionals then cover could be sought. It will, of course, be dependent on what happened and any remedial work undertaken. Insurers will review each situation individually. An insurance broker can help you present these in the most beneficial way.
Underwriters will need to know various details regarding the risk, including any history of incidents that could give rise to a loss, your business description, details of any storage tanks and anything else that may affect your exposure to a pollution event. Your broker will work with you to gather and present the necessary information.
Absolutely. While many farm insurance policies will include EIL cover as standard, EIL cover can be purchased for any industry or business which bears risk of a pollution incident.
Yes, environmental liability insurance provides cover for environmental damage. Standalone policies have a limit of indemnity of up to £5million, while our farm insurance includes a limit of £2million.
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