CIVIL LIABILITY FOR POLLUTION

The frequent repetition of ecological emergencies, sometimes real catastrophes, together with the growing expectations of the community to respect the environment, make the issue of tools to protect against harm to the ecosystem a highly topical one.

For these reasons, pressures to properly assess and manage environmental risks are steadily increasing. Said pressures come from a variety of sources, including:

• • increasing legal sensitivity to these issues, which exposes businesses to a greater risk of incurring large costs;
  • investors, buyers and sellers, with their requirements for proper management of the environmental factor and the risks it poses to the enterprise;
  • Increased awareness and perception of environmental problems;

Liability for environmental damage resulting from the operation of the activity
This coverage refers to civil liabilities arising from contamination, whether gradual or sudden, originating during future operation of the business. Insurance coverage may refer to the costs of cleanup at one’s own site or to cleanup made compulsory for damage to third parties, property or bodily injury caused by pollution, and legal defense costs arising from the claim.

Contractor’s liability for pollution
This coverage is designed to provide protection for pollution liabilities related to contractor activities (including asbestos removal work), whether arising from new pollution incidents or the extension of existing contamination. Coverage may extend to business interruption damages, such as costs resulting from delayed delivery of a work in cases of projects under construction.

Liability for environmental damage as a result of past pollution
Environmental damage coverages can provide protection for potential liabilities related to pre-existing pollution from past activities, either for the benefit of the company responsible for the pollution, the current owner of the site, or a developer and/or buyer who has inherited the risk under a purchase and sale agreement. Insurance coverage may refer to the costs of cleanup at one’s own site or to cleanup made compulsory for damage to third parties, property or bodily injury caused by pollution, and legal defense costs arising from the claim. Policies can have durations of up to 10 years.

Costs for remediation operations
These insurance programs can be structured to offer protection against unexpected and out-of-pocket costs in polluted site remediation projects. Coverage for costs mitigates financial risk by providing funds to complete the project in the event of budgeted cost overruns caused by random events such as a more extensive or entrenched degree of pollution. Insurance can be combined with sophisticated funding techniques to help the enterprise make the best use of its financial resources.

Pollution insurance associated with buying and selling businesses
The knots related to risks of contamination and pollution are among the most critical to unravel in the context of business purchase and sale pacts. This can cause financial uncertainties, which in turn can introduce elements of contention into negotiations, negatively affect a project’s ability to earn revenue, even represent a deal breaker in negotiations.