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Still thinking about environmental cover or pollution insurance?

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As a business owner in Australia, you may be responsible for any environmental pollution created by your operations, whether accidental or intentional. That’s where Environmental Liability, also known as Pollution Insurance or Pollution Liability Insurance, becomes essential.

After all, it’s not only your reputation that takes a hit if you pollute the environment. Tightening legislation means that the legal burden on businesses that cause harm to the environment can be quite severe. Whilst large multinationals may be able weather these costs, SMEs don’t have the same financial resources.

Understanding Environmental Insurance

Understanding Environmental Insurance and what it does and doesn’t cover is essential to the ongoing success of your business. For example, many business owners erroneously believe that their Public & Products Liability Insurance covers them all types of pollution events that happen over time. That’s not so, because in many instances it may only provide limited cover for sudden and unforeseen accidental pollution.

If you’re unaware of the differences between these two types of policies, your business can be exposed to significant costs. These costs can include defence costs, compensation to affected 3rd parties, clean up and business interruption costs associated with any downtime. This is in addition to the reputational damage you may suffer as the public becomes aware of the pollution event.

What does Pollution Liability Insurance cover?

Pollution Liability Insurance protects your directors, managers and business against allegations or actual environmental pollution. Clean-up costs, legal expenses, third party injury and or damage compensation as well as other expenses, such as investigation and technical reports.

It’s also important to know that there are more specified Pollution Insurance policies which covers clean up of contamination at your premises.

If you’re not sure what types of pollution incidents can harm the environment, here are a few examples taken from NSW EPA.

Unauthorised release of chemicals into the air via smokestacks.
Tankers roll over into creeks and discharge their contents.
Overflowing sewerage systems.
Illegal dumping of waste.
Factory fires.

Who can benefit from pollution insurance?

Pollution Insurance can benefit business owners and contractors who produce, store, transport or handle commercial quantities of hazardous/dangerous materials, chemicals or waste regularly. It can also be of benefit if your tenants handle potentially contaminated waste. Whilst this type of Environmental coverage has generally been more relevant to large industrial manufacturers, oil refineries and nuclear facilities, many of Australia’s state EPAs are beginning to focus on SMEs as to their responsibilities and obligations.

Management Liability Insurance

Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.

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Business Insurance

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

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Business Package

Purchase up to six products under one Business Insurance Package.

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To discover whether your business can benefit from Pollution Liability Insurance, talk to an local insurance adviser about your needs today.

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General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Insurance Advisernet, ABN 15 003 886 687, AFSL 240549

This article originally appeared on Insurance Advisernet News and has been published here with permission.