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What is environmental insurance?

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12th Apr 2010 by EnviroSure


Q: what is Environmental Insurance?

Not to be outdone by the above definition, we rework the article by EnviroSure's Anthony Saunders

A wide variance of laws apply around the globe pertaining to the damage to, reinstatement and restoration of the environment as a result of a range of business practices. What is legal in one jurisdiction, is not in another. What is an acceptable level of environmental degradation in one country, is not permitted elsewhere. Further, what we know to be safe today, could well be proved to be detrimental tomorrow.
The discussion here is not about wilful damage or deceitful conduct, but in the course of certain industries it is a fact that environmental degradation may be unavoidable under current accepted and lawful business practices. Industries such as open-cut coal or gold mining with their enormous scars on the earth and toxic waste issues, or businesses such as petrol stations with their underground fuel storage tanks, all make a negative impact on their surroundings. So too, do the production of oil, gas and ethanol, coal-fired power stations, sugar mills, and more. Deforestation, contamination and salination are common by-products of progress.
Oceans too, have become sinks for waste of shipping, chemical and mining industries, urban development and farming, where accepted practices in too many countries are less than environmentally friendly, and even less still, policed.
Environmental activists suggest that economic modelling may one day come to rationalise profits generated as a result of certain environmentally unsound practices, to be in direct proportion to the expense related to the necessary environmental restoration. Many argue that “pollution” ought to be avoided as a “Fact” rather than by measures “At Law”.
Insurance companies have therefore reacted by commonly excluding from their insurance policies any claim resulting from breaches of pollution, environmental protection and Climate Change laws. Specifically, Directors and Officers (D&O) Liability and General Insurance policies almost universally exclude cover for the liability arising from environmental contamination through the course of business.
The exclusions are commonly referred to as “Absolute Pollution Law Exclusions”.
Directors and officers may be unaware that they are not currently covered for the mistakes that they could contribute to or make, resulting in no financial means to restore the environment to legal satisfaction. Without Environmental Insurance, such businesses may be considered as conducting themselves with an element of reckless regard to the environment or “self insuring” which may result in their environmental liabilities equally to the full extent the liquidated asset value of the business.
At EnviroSure, Environmental Insurance it is the core product of a comprehensive risk management portfolio.
Environmental Insurance is designed to provide for the reinstatement of the environment where it is required, in the event it is a direct result of contamination caused through the lawful practice of business.


Author: Anthony Saunders, EnviroSure.com.au


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This answer is the subjective opinion of the writer and not of FinancialAdvisory.com
12th Apr 2010 by Anthony Saunders

Q; what is Environmental Insurance?

A; It’s an insurance contract designed to provide reinstatement of the environment as a result of its contamination caused by/through the various practices employed to sustain a built environment.

DEFINED:

Environmental Insurance provides for the costs to repair/reinstate (to reinstate the environment means to leave the “planet” in the same condition that it was in before it was polluted) our environment as a result of certain business practices, processes, services or advice (strategic, financial or otherwise) that have been undertaken unwittingly at the expense of our environment, built, developed, mined or otherwise.
Directors and Officers of certain business practices, processes, services or advice (strategic, financial or otherwise) are commonly unaware that insurance companies may commonly exclude cover for the liability that they may be subject to as a result of the environmental contamination that their policy holders may be responsible for.
Such “responsibility” may commonly be shared between the various “stakeholders” who may have contributed (in various proportions) to such environmental contamination.
Laws apply inconsistently around the globe that allow a wide variance of “environmentally degrading” practices (e.g.; mining, shipping, rocket science, fireworks, dry cleaning, underground fuel storage tanks, gas/oil/coal extraction, diesel/petrol refining, ethanol manufacturing, sugar mills and gold mining to name a few) to be conducted (some) without regard to a sustainable environment (i.e. ecosystems lost at the expense of deforestation and subsequent processes)... and our Oceans and Seas are treated like “sinks” where all is dumped (e.g. raw sewerage, complex salts and chemicals from desalination plants), and from where (much of) our natural food resources are farmed.
Insurance companies therefore have reacted by (commonly) excluding from their insurance policies any claim relating to Pollution/Environmental/Climate Change Laws. The exclusions are commonly referred to as “Absolute Pollution Law Exclusions”.
Many therefore argue that “pollution” ought to be avoided as a “Fact” rather than “At Law”.
Environmental Insurance is available by contacting insurance advisers who support EnviroSure insurance products which were created specifically to respond to (World Health Organisation) Pollution laws.
Directors and Officers of certain business practices, processes, services or advice (strategic, financial or otherwise) may commonly be unaware that they are not covered for the mistakes that they could make (or contribute towards), resulting in no financial means to restore (reinstate) our environment. Without Environmental Insurance, such businesses may be considered as conducting themselves with an element of reckless regard to the environment or “self insuring” which may limit their liability (to the environment) to the total (of their) liquidated asset values.
Economic modelling may one day rationalise that the profits generated as a result of certain environmentally unsound practices may be in direct proportion to the expense related to the environment’s reinstatement.
Author: Anthony Saunders, EnviroSure.com.au


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This answer is the subjective opinion of the writer and not of FinancialAdvisory.com



17th Nov 2009 In Insurance 2 Answers | 1862 Views
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