Is your environmental impact covered?
Of course every business appreciates the importance of looking after their local environment but at Sumner Insurance Services, we often find that many businesses are leaving themselves unnecessarily exposed to costs which could potentially cripple their business.
Many businesses think that their business insurance will protect them in the event of pollution; however this is typically not the case.
This was illustrated by a high profile court case when Bartoline, a manufacturer of solvents and wood preservatives, took their insurers to court.
After experiencing a fire on their premises, Bartoline were billed by the Environment Agency for the costs of work carried out in the clean-up process following the pollution of two local waterways from the foam and chemicals used in the fire fighting process.
Naturally, Bartoline wanted to recoup the costs of this on their public liability cover.
Their insurer rejected their claim which totalled £770,000 and in the subsequent court case the courts ruled in favour of their insurers as they did not consider the clean-up costs charged by the Environment Agency to be ‘damage’ and therefore not covered by their insurance policy.
For many years brokers had relied on Public Liability policies to protect clients against sudden and unforeseen pollution.
However, this case set a precedent and has now left some companies exposed. Whilst some insurers have attempted to plug the gap in cover by amending public liability policy wordings, these still do not provide adequate cover for environmental issues.
Very few companies feel that they have exposure to environmental risks however if your business owns, operates, buys and sells property, if it redevelops ‘brownfield’ land, uses or produces potentially contaminative materials or creates waste (solid, liquid or gaseous) then you do have an environmental risk and need to speak to a specialist broker.