Barsh & Cohen P.C. | Do you need environmental liability insurance?
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Do you need environmental liability insurance?

Do you need environmental liability insurance?

32228915_STo understand the need for environmental liability insurance, you first have to understand its history. Environmental insurance has been available in the United States since 1977, although the types of policies available were somewhat limited. As pollution awareness rose and hazardous waste clean-up costs skyrocketed, the market for environmental coverage started to grow.

During the 1980s, coverage expanded and more types of environmental insurance policies became available. Estimated annual premium for environmental insurance policies in North America now exceeds $1 billion! Other parts of the world have also demanded this type of insurance protection and environmental insurance has now become available on a global level.

Types of Environmental Insurance

The type of environmental insurance you or your client needs will depend on the unique risks of the business or properties. Among the types of environmental insurance are Pollution Legal Liability, Contractors Pollution Liability, Underground Storage Tank Liability, Transportation of Hazardous Materials Liability, Engineers and Consultants Errors and Omissions Liability, Post-Acquisition Real Property and Financial Institution Environmental Liability Insurance. A property owner often can buy a complete environmental insurance package that covers many different types of environmental loss exposures.

Do I Really Need This Coverage?

You or your clients may never need environmental insurance. But if you need it and don’t have it, it will be too late to purchase it. Most general liability or property insurance policies exclude coverage for pollution. These exclusions increase the need for a special environmental insurance. This is why many different types of environmental insurance were developed, including coverage for lenders facing clean-up for contamination of property involved in a real estate transaction.

The Bottom Line

Losses caused by environmental damage due to negligence, contractual obligations, torts, violations or for other reasons could cost a company millions of dollars if the proper insurance coverage is not in place. Clean-up of environmental waste can cost millions, if not billions, of dollars. The wise business owner will take some time to analyze his risk exposures and purchase any type of environmental insurance needed to minimize those risks.

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