Environmental Liability | GARDIA Insurance Company

In most countries of the world, companies that manage, own and sell land as well as develop and finance real estate projects are exposed to various risks associated with liability due to environmental pollution - even if they were not involved in the resulting pollution.

The basis of the subject’s legal liability may be both the pollution that existed at the site earlier (previous / historical pollution) and the environmental pollution during production activities. Most general liability insurance contracts exclude such risks, including claims resulting from gradual (e.g., fuel leaks at oil storage facilities or gas stations over a long period of time) and historical pollution. A significant point is the insurance of environmental objects, which allows for mitigation of environmental risks and adverse environmental consequences.

The possibility of acquiring the environmental pollution comprehensive liability insurance or eco-insurance in the Russian insurance market is limited: as a rule, only the risks associated with sudden and unforeseen pollution of the environment (for example, as a result of explosion at an entreprise) are covered under general civil liability policies. Policies of Compulsory Civil Liability Insurance of Hazardous Production Facility Owners against Damage Caused as a Result of Accident at Hazardous Facility directly exclude the risks associated with causing damage to the environment.

Thus, many industrial enterprises continue to bear the risks associated with causing damage to the environment and the costs of clearing the contaminated areas, while environmental insurance could easily cover these undesirable factors.

Who can insure

Any company in the market that has stationary industrial, production and other facilities

Manufacturing sector – from heavy industry and chemical companies to food and beverage manufacturers
Energy and engineering communications
Waste recycling and disposal
Construction
Bulk storage
Retail and warehouse activities
Shipping and logistics
Property owners and developers, including tenants
Companies providing professional environmental services
Multinational companies

What can be insured

GARDIA offers a comprehensive insurance product that ensures the property interests of the policyholder associated with damage to the environment and claims as a result of such pollution, referred to as environmental insurance.

Comprehensive environmental risk insurance provides the protection of the policyholder's property interests associated with the emergence of environmental liability as well as other claims associated with environmental risks. Environmental insurance policies cover all types of pollution (sudden, unforeseen as well as gradual) and regulatory clean-up obligations that are becoming more and more stringent.

The insurance product of GARDIA is intended for stationary industrial, manufacturing and other facilities. Environmental liability insurance due to environmental pollution covers losses caused by the insured object. Within the framework of such an insurance policy, environmental objects are insured, which include both the policyholder’s individual environmental sites and the entire property complex as a whole (two or more locations / sites).

Insured risks

Expenses for cleaning up the policyholder’s production area as well as the territory outside the policyholder's enterprise from pollution
Expenses for causing damage to life, health and property of third parties on and outside the production area due to pollutant emissions
Damage due to gradual as well as sudden and unforeseen pollution
Expenses for legal protection and survey of insured events related to environmental pollution
Damage due to emerging pollution (i.e. in the course of production activities)

Supplemental coverages

Unknown cases of pollution that existed at the site before
Interruption in the policyholder’s production
Liability for environmental pollution during transportation of hazardous substances
Policyholder’s territories that are not owned by him

Best of GARDIA:

Efficiency
in resolving issues

Constant
feedback

Individual
approach

Prompt
response

Benefits of Environmental Indemnity Insurance from GARDIA:

Comprehensive insurance coverage and flexibility
Special Insurance rules
Long-term environmental insurance contract (over a year)
Conducting analysis and necessary expertise for risk assessment (underwriting)
Experience in settling insured events due to environmental pollution
Financial security

FAQ

How do you know if an environmental risk meets the Insurance Company’s insurability requirements?

Pure risks, not speculative risks, become the subject of insurance:

Possility to unambiguously determine the time, place and cause of damage
Random and probable nature of environmental risks
Environmental damage assessment. The Insurer must have the objective data sufficient to assess the likelihood of damage and its extent.
Catastrophic nature of damage. Evidence shows that environmental risks may lead to negative financial impacts on a massive scale

What is the difference between Environmental Risk, Civil Liability and Property Insurance policy coverages?

The coverage of the Environmental Risk Insurance contract closes the gaps of other policies in terms of environmental risks, also in a structure that allows you to effectively meet the requirements of the liability regime established for compensation of the environmental damage. The General Civil Liability Policy completely excludes liability for any damage resulting from pollution of the natural environment. As a general rule, a Property Insurance policy covers the Policyholder’s expenses for restoration of damaged or lost property under the risks specified in the insurance policy. Namely, covering specific buildings, not plots (soils). The Property Insurance policy contains a clause to cover the costs of clearing garbage, which is also ineffective when it comes to environmental pollution.

What additional extensions of Environmental Risk coverage exist?

Production interruptions costs, which the Policyholder bears if, as a result of dangerous environmental situation (in the absence of damage to property) at the enterprise, its economic activity must be suspended until the consequences of the environmental accident are eliminated Expenses for clearing the Policyholder's production area and compensation for damage to Third Parties as a result of historical pollution (cumulative environmental damage)

What is the “claims made basis” feature of Environmental Insurance?

The consequences of environmental damage are long-term. An insured event in the form of causing damage falls within the insurance period, and the period for submitting claims is actually not limited. This insurance contract design allows, to a certain extent, to solve the problem of clearing the Policyholder’s territory from pollution. In this case, the Insurer reimburses the expenses of clearing only when there is a claim or warrants from state authorities on clearing the territory. This condition is also supported by a clause on the exclusion from insurance coverage of the expenses of carrying out measures for the production area’s environmental impact assessment at the Policyholder’s initiative. And, finally, this form of insurance policy allows the Insurer to cover the risks of so-called historical pollution associated with the problems of accumulated environmental damage as well as liability for this damage.