What is environmental insurance?
Environmental insurance is a “fail safe” insurance policy that provides the funds to reinstate the contamination to a level that is in keeping with the expectations of the laws that prevail on the day and “as a fact”.
In the absence of such laws, common sense or “fact” ought to apply or International Environmental Standards should be adhered.
Important: Remediation should result in a satisfactory outcome where parties involved should consider the future use by the next generations.
Commercial definition: Environmental insurance covers the costs related to any unexpected pollution that has harmed the environment, built or otherwise.
Technical Definition: Environmental insurance covers the financial cost incurred by an entity as a result of a fortuitous pollution risk necessitating precautionary action.
Historically
Since the advent of climate change, greenhouse gas emission targets and carbon trading, the world has woken up to the fact that environmental security (the protection of our environment) is unavoidable.
How do we reduce the pollution that we produce and, at the same time, increase productivity and profitability?
We have conjured barriers of entry into a new climate change economy suggestive of an attitude of avoidance to doing something new. Our economic society is in some ways like an “old dog” unable to learn a new trick. When the new trick is educating the corporate social mind to be environmentally responsible do we have the nous to collectively address it? *
* With “it” being the corporate Directing Mind.
The pollution exclusions are a reaction to limited education on what truly constitutes an insurable pollution loss versus the deliberate act of pollution.
Examples of occupations or processes where the environment is knowingly and deliberately being contaminated include:
- Any form of motorised travel
- Any storage of fuel or other toxins
- Dry cleaning
- Mining
- Hairdressing
- Oil exploration
- Energy production
- Coal seam gas extraction
- Plastic carry bag production
- Storage of drinking water in plastic bottles… the list goes on.
It is quite a complex issue to consider how an insurance company can provide cover for environmental liability when much of the environmental contamination occurring can be of a deliberate nature?
You don’t need to be Einstein to work out how to convince an insurance company when to provide cover but you do need to be clever to understand the benefits to our environmental security of making environmental liability insurance inclusive in all policies and in responding to what we cannot control.