The Need for Environment Insurance for Business

Before the United States government got legislation passed relating to environmental issues, it had not been thought about necessary to have environmental insurance. In fact there wasn't a specific product in place, other than regular liability insurance and in lots of instances environmental issues, such as pollution were usually excluded.

However, the environmental legislation was fully enforced and within a short time companies found they had claims which were being heavily pursued. It is always at this time that the policyowner wording gets looked at closely, often to discover that the claim event is not covered, leaving the company in a unstable financial position.

The insurance market is always keen to find new markets to get involved with and it didn't take long for a quantity of them to recognize that there was an opening for specific environmental insurance. Products were developed and are now available from most general insurers.

Initially premiums were high; first because there were only a few players, so the there was small competition and secondly, it was a an unknown market. No knew how lots of claims would occur and what the financial value of claims would be. It was therefore important for insurers to build up a reserve fund.

The oil industry has an obvious require for environmental insurance. However, lots of other companies that may not have thought about they could present a pollution risk also require to buy the insurance. For example, a company which stores or transports materials that could leak pollutants, needs to buy environmental insurance.

Any company or organization that may get involved with environmental issues of kind or another, no matter how remote the chances of a claim arising are needs to get the protection of environmental insurance coverage. While premiums are pricey, compared to regular liability insurance premiums, the protection they afford far outweighs the cost of the cover.

Environmental insurance is not in place, so a company can relax its safety procedures, knowing it's insurance protection in place. It is there so that in the event of an accident occurring, a company has financial protection. Before any insurer allows cover to be put in to place a full survey is undertaken to be positive that the company takes safety and environmental issues seriously.

Policy wordings clearly state that the owner responds in the event of sudden or gradual accidental incidents. It extends to provide cover for property damage, bodily injury & damage directly related to a pollution incident.

An important aspect of an environmental insurance owner is the ability to access money immediately an incident occurs. Pollution accidents need an immediate response to cease it spreading far; this requires funds. There is not time for the insurance company to assess the damage & what needs to be done. Work must start directly as well as a company needs to know it can get the work started without prior approval from their insurer & that they will get reimbursed for the cost that exceeds their excess liability limit set.