Last October 15, 2021 was the deadline for sectors in priority 3 for the delivery of the financial guarantee complying with the Environmental Responsibility Law 26/2017.
Environmental liability insurance fulfills the obligation to provide the financial guarantee established in Law 26/2007. In addition, it encompasses a series of coverages defined in three phases: prevention, avoidance and repair.
What does the Environmental Liability policy cover?
Environmental liability insurance covers the obligations of the company's activity with respect to the prevention and avoidance of environmental damage, as well as the primary repair of damage caused by the insured.
The financial guarantee is nothing more than a tool to guarantee that the company has the economic means to face claims derived from any damage that may occur in its daily activity.
As mentioned at the beginning, the sectors that must now comply with this obligation are those under priority 3.
Environmental Liability Insurance Coverages
We detail some of the most important coverages included in the Environmental CR policies:
- Prevention and mitigation costs.
- Damage to biodiversity including the three degrees of reparation according to law 26/2007 and its modification in law 11/2014.
- Clean-up costs due to contamination and/or environmental damage outside the insured premises due to both accidental and gradual contamination.
- Clean-up costs due to contamination and/or environmental damage within the insured premises due to both accidental and gradual contamination.
- Transportation of the insured's merchandise both in the insured's own vehicles and those of third parties.
- Crisis containment /Crisis management.
- Business Interruption.
- Contractors Coverage (Company's activities performed outside the insured risk situations).
- Automatic coverage of subway tanks.
- Personal and/or material damage both inside and outside the insured premises.
- Defense and Bonding Expenses.
Environmental Risk Analysis
The amount of the environmental guarantee will be established after the Environmental Risk Analysis (ARMA). By identifying the risks due to accidents, depending on the company's activity, the scenario and the natural resources affected, the environmental damage can be quantified and monetized.
Am I covered under my CR policy if I have Accidental Pollution coverage?
No. First of all, they must be independent policies. In addition, with the accidental pollution CR coverage, only damages to third parties due to accidental pollution are covered. Whereas in the Environmental CR policy, gradual damages as well as own damages are also covered.
Secondly, environmental liability insurance covers, among other things, preventive measures, damage to natural resources other than pollution or the total repair of these natural resources.
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