Environmental Liability Insurance

Environmental liability insurance covers companies from many types of uninsured environmental liabilities they could face. Companies that buy or sell property that may be polluted run a risk of being forced to pay for environmental remediation efforts in order to comply with state and federal regulations. These companies may also be faced with paying out damages attributable to the pollution. The two most basic forms of environmental insurance are pollution legal liability (PLL) policies and cleanup cost cap policies.PLL policies protect companies from claims of property damage, personal injury and cleanup costs related to the environmental pollution. Companies that buy abandoned or defunct industrial assets frequently also purchase PLL policies to protect themselves against as-yet-undetermined liability risks. These assets can range from large manufacturing plants, which can contain toxic waste and heavy metals, to small gas stations and dry cleaners, which often hold petroleum waste and hazardous chemicals. Insurers require that companies signing up for a PLL policy obtain an environmental assessment from an experience remediation consultant.

Cleanup cost cap policies protect companies from cost overruns connected to a particular remediation project. Since cleanup efforts can be expensive and time-consuming, cost cap policies can be helpful in dealing with projects that exceed their budget. Companies must provide the insurer with a detailed remediation plan, including cost estimates for the project, in order to qualify for coverage.

The costs of an environmental liability policy can vary depending on location, level of pollution and issues with third-party claims. Business owners must make sure that they have adequate coverage to cover the costs of repairing the damage, settling any outstanding third-party claims, meeting government environmental standards and preparing the property for its new purpose. Environmental liability coverage can help with these costs while protecting the assets of the company, its owners and their families.