Environmental Impairment Liability

Under EU Legislation all companies are subject to the costs and liabilities of environmental exposures, even those that are not directly involved with hazardous materials. Risk managers in virtually every industry must proactively analyse environmental risk issues to determine vulnerabilities. Aon can provide you with the specialised expertise needed to understand your exposure and how it impacts your financial objectives. In an increasingly punitive, legal and regulatory environment, more forward-thinking companies are taking proactive steps to explore and transfer environmental risk.

EU Environmental Liability Directive

With the transposition of the EU Environmental Liability Directive 2004/35/EC (ELD), operators and companies that cause damage regulated by the ELD have significant and new liabilities for costs, damages and losses. The ELD is an EU wide legislation created to establish a common framework for the prevention and remedying of environmental damage at a reasonable cost to society. A number of Member States have already committed to requiring compulsive financial security. You can find out more on the EU Commission Website.

Aon Solutions

Depending on your exposure(s) there are different ways this form of insurance can be used as an effective liability shield from pollution events and these can be tailor-made to your business through active engagement with Aon industry experts:

• Contractors Pollution Liability (CPL) – protecting contractors from pollution damage as a result of their operations, annually or on a project basis
• Environmental Impairment Liability (EIL) – covering new pollution events from onsite activities
• EPA Environmental Impairment Liability (EPA EIL) – using an augmented EIL policy to satisfy licensee requirements set out in the EPA’s Guidance on Financial Provision for Environmental Liabilities available here (https://www.epa.ie/publications/compliance--enforcement/licensees/reporting/financial-provisions/guidance-on-financial-provision-for-environmental-liabilities.php).
• EPA Surety Bonds – using surety solutions to satisfy licensee requirements set out in the EPA’s Guidance on Financial
• Historic Pollution Liability (HPL) – protecting buyers of share sales or asset purchases where there can be uncertainty around historic liabilities, often through mergers and acquisitions

Advantages

• Minimize gaps in insurance coverage
• Balance sheet protection
• Reputation and brand management
• Meet statutory requirements for financial assurance
• Insulate against regulatory risk and changes to environmental laws
• D&O accountability and financial disclosures
• Satisfy lender/financing requirements