Environmental risk involves a wider range of issues than are often expected – organisations need to be clear on what their insurance policy covers

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It is a common misconception that environmental risks only relate to traditional “pollution”. However, a business could be exposed to an environmental risk if it is involved in any of the following activities:

  • owns, operates or buys and sells property
  • operates on third-party premises
  • uses, stores, transports or produces a potentially hazardous substance that may cause contamination
  • creates solid, liquid or gaseous waste
  • redevelops brownfield land
  • operates in a biodiverse environment, such as next to a nature reserve or protected habitat.

If any of these apply to an employer and a claim is made, the organisation may find itself dangerously exposed unless it has the right cover in place.

Companies often assume that they are covered by their general liability policy, but without specific environmental cover, they will almost certainly be left to handle a crisis – and pay for any clean-up, as well as all associated works – without the benefit of insurance.

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Environmental risk policy checklist