What is Environmental Insurance?

Environmental Insurance

Environmental Insurance/Environmental impairment liability insurance (EIL) provides cover for clean-up costs and legal defence. Although it doesn’t cover fines, it can cover third-party costs for damage to nearby locations, and potentially compensation for any loss of business suffered as a result.

The losses or damages covered by environmental insurance usually include claims for bodily injury, property damage, clean-up costs, and business interruption due to the environment or company effect on the environment.

Businesses more commonly use environmental insurance in industries, such as chemical, manufacturing, transportation, warehousing and waste disposal.

What is covered?

  • Coverage of remediation costs for pollution on, at, or emanating from insured locations.
  • Coverage for remediation costs for claims from governmental agencies for pollution on, at, or emanating from the insured locations.
  • Third-party insurance coverage for bodily injury, property damage, and remediation costs for pollution on, at or emanating from the insured locations
  • Coverage for claims arising from listed non-owned disposal sites
  • Coverage for legal defence expenses for any claims covered under the policy
  • Coverage is available for natural resource damages claims
  • Coverage is available for mould-related claims
  • Coverage is available for underground storage tanks
  • Coverage is available for first-party business interruption

What should you know?

Accidental pollution damage can be gradual, so the effects may not notice until years down the line. Unfortunately, a business can also be held responsible for historical environmental damage. For example, if there was a slow oil leak onto a property you bought, the company is responsible for the cleanup and fixing the situation. Environmental Insurance will cover can also protect you in this case too.

You may think your public liability insurance covers your business for any breaches or accidents, but it may not. Public liability covers harm to individuals or their property. However, public liability will not cover damage or bodily injuries to a third party caused by pollutions (environmental) due to your company. That is why it is essential to purchase environmental insurance to be fully covered.


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