UK companies face widening exposure to liability for environmental losses
26 November 2007
LG, the London-based business law firm, has warned UK companies of their increasing exposure to liability for environmental losses.
The warnings came at a seminar highlighting the changing landscape for environmental liability and environmental insurance, held at LG's new offices at More London Riverside.
Chairman David Breslin, an insurance and reinsurance partner at LG, said: "The European Environmental Liability Directive, coupled with gaps under existing public liability insurance policies, means that UK companies are becoming increasingly exposed to liability for environmental losses in the UK and Europe."
Colin Peck, partner in LG’s Insurance & Reinsurance Group, explained: "The cases of Yorkshire Water v Sun Alliance & London Insurance, and more recently Bartoline v Royal & Sun Alliance, highlight a concern that many companies are leaving themselves badly exposed to environmental liability by failing to appreciate what risks their public liability policies do, and do not, cover.
"This coverage may be limited to a very narrow form of cover for environmental liability arising only from 'sudden, unintended and unexpected' losses – and even then, limited to claims from third parties for damages as a result of a claim brought in tort. There are real concerns as to the recoverability under a PL policy for the cost of preventative action taken by the insured; the insured's own remedial costs; and the insured's liability for statutory clean-up costs."
He added: "Companies need, with the help of their brokers, to be testing their PL policies against different factual scenarios to see if, and how, they will respond. And directors and risk managers need to be aware of, and seriously consider, whether any of the alternatives are more appropriate for their particular organisation".
Also speaking at the event was Duncan Spencer, Regional Manager for Environmental Impairment at AIG Europe (UK) Limited, on the alternatives for companies seeking protection over and above their public liability insurance, and Colleen Theron, head of LG's Environmental Group, on what the Environmental Liability Directive will mean in practice for companies in the UK.
Notes to editors:
- LG’s Insurance & Reinsurance Group has considerable experience and understanding of the international and London markets. They handle litigation, arbitration and dispute resolution of complex matters. They also advise on transactional and corporate issues confronting insurance and reinsurance companies, brokers, agents and Lloyd’s syndicates.
- LG's Environmental Group advise on a broad range of environmental and health and safety matters, with particular expertise on contaminated land issues, environmental insurance and regulatory compliance matters.
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