Information on environmental impairment liability insurance including costs, coverages & options. This form of insurance can help fill the coverage gaps created by pollution exclusions in basic general liability and commercial property policies.
Environmental Impairment Liability Insurance
Do you own a business that engages in tasks that create toxic waste? If so, there's no doubt that you make every effort to ensure that you are following all safety protocol to prevent the waste from contaminating the environment, employees, or bystanders.
Despite your best efforts and constant inspection of the vessels that you use to hold hazardous waste, accidents happen. For instance, a container may be compromised, or it may tip over. Should that happen, the hazardous materials held within the container could seep out and pollute the environment, including the air, the groundwater, and the vegetation that surrounds it.
As you can imagine, should this happen, not only will you be required to clean up the mess, but you will also incur hefty fines. These costs can be astronomical and can put your business in financial distress. Moreover, such an incident could do serious harm to your reputation, hindering the success of your business.
With environmental impairment liability insurance (EIL), you can protect your business from a lot of the costs that are associated with any incident that impacts the environment.
What's Covered by an Environmental Liability Insurance Policy?
There are two different kinds of environmental impairment liability insurance:
- Contractors Environmental Liability Insurance. This type of policy is designed for environmental hazards that are associated with operations.
- Premises Environmental Liability Insurance. This type of coverage is designed for environmental hazards that are associated with owning a property.
Each environmental impairment liability insurance policy offers three basics forms of coverage, including:
- The costs of any damages that occur as the result of hazardous waste contamination, such as property damage and personal injury.
- The costs for cleaning up a hazardous waste accident.
- Costs that accumulate during the cleanup process.
Some policies will also offer coverage for legal fees, should any legal action take place. This can include the cost of defense and court fees. Examples of instances in which an EIL policy offer coverage include:
- If the environmental damage caused by your company results in the bodily injury of a bystander, or damages the property of a surrounding property owner, an EIL insurance policy will offer compensation to those who have been affected.
- The costs related to any cleanup efforts that are mandated by the government as a result of an incident that has impacted the environment. An insurance provider isn't required to cover legal fees that may be related to such a cleanup, but depending on the situation, it may.
- Injuries can occur during the cleanup process. If someone sustains an injury while cleaning up the pollution, your environmental impairment liability insurance will offer coverage for any costs associated with that damage.
Make sure you find out exactly what your specific policy covers so that you know how you are protected from any incident that affects the environment.
Are There Any Exclusions Involved?
Like all types of insurance policies, an environmental impairment liability insurance policy does have some limitations. Most policies will exclude their coverage for any of the following situations:
- Any damage that the insured should have expected, within reason
- Any damage that occurred that was intended
- Any bodily injuries that are sustained by employees of the insured party
- Damages that occur as a result of failing to comply with the law regarding the proper and safe handling of toxic materials
It's advisable to find out what your policy excludes so that you aren't left surprised in the event that an incident does arise.
Environmental Impairment Liability Insurance - The Bottom Line
We hope this article on environmental impairment liability insurance has been informative. If own a business that produces any type of hazardous material, having an EIL policy is definitely in your best interest. The legal fees that are associated with any pollution-related incidents can be extremely damaging to your business. Since your business is one of your biggest assets, protecting it to the fullest extent possible just makes sense.