Environmental Liability Insurance

Do You Need Environmental Liability Insurance?

Environmental impairment liability insurance was first made available in the 1970’s in response to the government cracking down on companies that were polluting the ground and air with hazardous waste. For the first time, corporations were being forced to clean up their damages and the costs were astronomical. Today, companies are more careful about how they store and dispose of toxic waste, but accidents and polluting disasters still happen. Environmental liability insurance can help.

Agents in the Trusted Choice® network can help you find the right business insurance policy for your company. These independent agents can answer your insurance-related questions, help you assess the risks faced by your particular industry and present you with a variety of suitable policies from which to choose. Contact a member agent in your neighborhood for more information and you can start comparing environmental liability insurance quotes today.

America’s Worst Man-Made Environmental Disasters

  • The Three Mile Island nuclear meltdown in 1979 forced the utility companies General Public Utility and Metropolitan Edison to pay out millions of dollars in settlements to area residents
  • Love Canal in Niagara Falls, NY made headlines in 1978 when it was discovered that the toxic waste dump had sickened hundreds of residents
  • The Libby asbestos contamination in Montana sickened thousands and bankrupted the company when it was found that the W.R. Grace plant had been spewing asbestos over the town for decades
  • The Exxon Valdez oil spill in 1989 dumped 10.8 million gallons of crude oil and contaminated 11,000 miles of ocean
  • Once a mining town, the ghost-town of Picher, Oklahoma is known as the most toxic place in America; the area, declared a Superfund site in 1981, is so polluted with lead it has been declared too toxic to clean
  • The Gulf oil spill in 2010 leaked 206 million gallons of oil into the Gulf of Mexico; BP has already paid $14 billion in clean-up costs and $10 billion in compensation, and is expected to owe more as clean-up continues

What Is Environmental Liability Insurance?

Environmental Impairment Liability Insurance, also known as EIL Insurance, is an insurance policy created specifically for companies and contractors who engage in jobs or production that have toxic by-products. This hazardous waste is carefully contained but sometimes seeps through containment vessels and pollutes the ground-water, air or vegetation surrounding it. When this happens, companies are assessed fines and ordered to clean up the mess. This can be quite expensive and financially hinder a company’s growth. ELI insurance will cover many of the associated costs so that the company can continue to remain profitable.

There are two types of environmental impairment liability insurance coverage:

  • Premises EIL insurance: This coverage is written for property ownership and location-based environmental hazards
  • Contractors EIL insurance: This coverage is written for operations-based environmental hazards

What Does Environmental Liability Insurance Cover?

EIL insurance policies provide three basic types of coverage. This includes coverage for:

  • Compensatory damages
  • Required clean up costs
  • Costs sustained during voluntary clean up

In some, but not all, cases, court costs and legal defense fees are included in the coverage. Read on for more information about each coverage type.

EIL Insurance Provides Compensatory Damages Coverage

If pollutants or other environmental damage done by your company lead to bodily harm or property damage to others, your environmental liability insurance coverage will provide compensation for any accrued costs.

In many cases, companies are unaware of toxic waste leaks or other environmental pollution problems. For this reason, EIL insurance companies will provide a retroactive date on their policies. If a problem or pollution event occurred after that date and the policy is in effect, you should expect to be covered. Most policies will limit coverage only to instances where:

  • The injury or property damage can be shown to have been caused by a pollution event that occurred after the retroactive date on your policy.
  • A claim was first made against you company while the policy was in effect.
  • The claim is reported to the insurance company within 15 days of a policy termination.

The insurance company will also provide coverage for your associated legal defense fees. It is up to the EIL insurance company, not the insured company, whether or not to pay out a settlement on any claim or suit rather than allowing it to go to court.

EIL Insurance Provides Coverage for Mandated Clean Up Costs

Environmental liability insurance policies will provide compensation for costs associated with any government-mandated clean up effort so long as the mandate was initiated during the time that the policy was in effect.

In this case, the insurance company is not required to cover any associated legal fees or court costs but they may, if they choose to, step in with their own legal team if they feel the situation merits intervention.

EIL Insurance Provides Coverage for Voluntary Clean Up Costs

Sometimes clean up efforts are reasonable or necessary and may be initiated by your company prior to government intervention. When this occurs, your company can petition your insurance provider to request reimbursement for these costs.

In many cases, however, the insurance company will give consent for coverage only in the event that the pollution incident presents an imminent danger of substantial damages, whether physical, environmental or to personal property.

EIL Insurance Offers an Extended Reporting Period Option

Most environmental impact business insurance policies will enable to you purchase an extended reporting option. This will permit you to continue to submit and receive reimbursement on claims for a period of time, usually 12 months, after the termination of your policy. Payments will only be made on claims resulting from pollution events that occurred after the policy’s retroactive date but before the date of termination.

This provision was put in place so that insured companies can continue to receive reimbursements even if the insurance company refuses to renew a policy because of a severe pollution event.

What Is Excluded from EIL Insurance Coverage?

Environmental liability insurance does have limitations. Policies exclude coverage for the following:

  • Damage that was intended or should have been reasonably expected by the insured
  • Damage to the insured’s own property, whether rented or owned
  • Bodily injury to any employee of the insured
  • Damages resulting from willful non-compliance with the law

Learn More about Environmental Liability Insurance

If you are interested in learning more about environmental impairment liability insurance and how a policy can benefit you and your business venture, you can set up an obligation-free meeting with a professional in the Trusted Choice network. All member agents have taken a pledge to provide their customers with exceptional service and ethical advice.

There is no need to spend a lot of time comparison shopping. Agents in the Trusted Choice network work with several top-rated insurance companies and can provide you with a variety of competitively-priced policies from which to choose. There are more than 22,000 member agency offices in the United States, so it should be easy to find an agent near you. Contact your local member agent now to start comparing environmental liability insurance quotes.

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