Marine Pollution- Main

We celebrate Earth Day to learn as a community about how we can do so much to protect the Earth and the environment. The planet is full of beautiful places and breathtaking nature. The scenic environment helps us in many ways, including getting those cool Instagram pictures. Additionally, the clean air to clear waters allows us to forget worries and embrace nature at that moment.

Unfortunately, over the years there is a growing concern about air, marine pollution and environmental contamination. One of the main causes of this deviating problem is business activities. It is a serious concern, and there is still time to make the change.

When a business causes environmental damage, they are held responsible and will have to pay for the cost of cleaning. These costs are very costly, and one accident can result in millions. 

It’s time for businesses to put the environment’s safety forward and act on their mistakes. This case study will explain how environmental insurance assisted a shipping business to fix their marine pollution mistake and saved them HKD 12 million. 

Client Background

The client is a shipping business that oversees cargo ships transporting various goods from one country to another. These goods include cars, raw materials, oil, and much more. When running a shipping business, there are many environmental risks that the industry must consider. As cargo ships are one of the main contributors to marine pollution and air pollution.

Marine pollution is a concerning problem in today’s world. The ocean is being flooded with two main types of pollution: chemicals and trash. There have many cases where ships have been the cause of serious marine pollution incidents. The incidents include oil contamination, fallen cargo and ship material contamination (paraffin). Additionally, a ship doesn’t have to be a cargo ship to cause pollution; it could be a yacht, cruise ship or even a smaller boat.

Therefore, the client has a higher chance of causing marine pollution due to the multiple cargo ships and journey distances.

Client Problem – Marine Pollution Accident 

One of the client’s ships was transporting large cargo containers with various products from Asia to Europe. The business had planned the safest route and ensured the cargo was secure. All procedures were in check, and the ship had left Asia.

The ship faced harsh weather conditions during the journey, causing the ship to lose control and crash into some rocks (in-port). As a result of this accident, there was a considerable large hole in the fuel supply, which was now pouring out the oil into the sea.

Marine Pollution-crash

The captain immediately informed the nearby cost guards and neighbouring country authorities. Unfortunately, it was too late, and the damage had begun as the oil was causing a large amount of marine pollution in the area.

Authority took the ship to the local repair grounds, and the local government informed the business of the accident. The country involved also sued the company for marine pollution damage claims. The business was liable to pay for the compensation and marine pollution cleaning costs.

Even if it was an accident, the business would have to follow legal protocols and pay for the required costs, which could cost millions. A marine pollution incident is never taken lightly as it harms aquatic life and locals nearby.

How Environmental Insurance Was the Solution to The Marine Pollution Accident?

Thankfully, the business had purchased environmental insurance. Environmental insurance, also known as pollution liability insurance, will cover claims and lawsuits due to the pollution caused while operating the business. The insurance will also help the company with the funds to clean up the pollution or waste created.

It is the best insurance when faced with an accident that causes unwanted pollution or environmental damage. In this case, the insurance will reimburse all the compensation/fine costs and the cost of marine pollution clean-up. Sometimes a business does all it can to avoid environmental harm, but accidents do happen, and it is important to act on them.

Therefore, environmental insurance covered the following costs:

  • Marine Pollution Clean-up Costs: HKD 2,000,000
  • Compensation Costs: HKD 10,000,000
  • Legal Costs: HKD 150,000

Total Costs: HKD 12,150,000


There are various types of environmental damages a business can cause and pay for. From marine pollution, air pollution, waste contamination and more. Environmental insurance will cover any environmental damage caused by an insured company.

The insurance is crucial to any business or industry involved with chemical-based products, manufacturing, transportation, or warehousing of chemical products. Environmental insurance usually covers claims for bodily injury, property damage, clean-up costs, defence costs and business interruption due to the environmental issue.

Businesses should buy environmental insurance before the slightest chance of an accident; it’s better to be prepared with environmental insurance.

It is time to turn into a green business now and do your part for the environment. 

To Learn More about Environmental Insurance and get the best protection for your business and protect the environment, contact Red Asia Insurance.