Environmental insurance

Environmental insurance is designed to provide protection to the insured from pollution or environmental damage. It is an essential risk management tool for property and corporate transactions, industrial site closure and brownfield development.

There are several reasons why environmental insurance should be considered in contaminated land transactions and operational site management:

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Contamination and pollution incidents can result in significant environmental liabilities - regulatory enforcement, third party claims, clean up costs and loss in property value
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Site investigations and remediation work will often miss contamination
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Almost every party in a transaction can inherit liabilities for contaminated land - seller, buyer, landlord, tenant, funder
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Premium costs have been reduced by increased competition in the market
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Clients are reluctant to soley rely on environmental indemnities
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The Environmental Damage Regulations introduced a legal requirement for site operators to take immediate action and inform regulators about environmental damage
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Contractors activities and flooding can mobilise existing contamination

See Practice Note: Environmental insurance—when is it needed?.

Clean up costs can be one of the largest liability risks in any property transaction.

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