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Environmental Impairment Liability Insurance (EIL)

Environmental Insurance deals with insuring pollution related loss exposures. Exposure to environmental losses legally comes from several areas. One area is negligence. Negligence is the failure to use what is usual customary and reasonable care in this type of situation. Intentional torts, or civil wrongs, will also invoke liability exposures in this area of losses. Strict liability imposes inherent legal liability in the environmental area usually by statue, environmental laws, and federal, state and city ordinances. Also legal liability can be imposed via contractual obligations and commitments. Below is a listing of the major environmental and executive order statues that many small businesses are faced with to be in compliance.

Summaries of Environmental Laws and Executive Orders:
The following laws and EOs help to protect human health and the environment. EPA is charged with administering all or a part of each.

•Atomic Energy Act (AEA)
•Chemical Safety Information, Site Security and Fuels Regulatory Relief Act •Clean Air Act (CAA) •Clean Water Act (CWA) (original title: Federal Water Pollution Control Amendments of 1972) •Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, or Superfund)
•Emergency Planning and Community Right-to-Know Act (EPCRA)
•Endangered Species Act (ESA)
•Energy Independence and Security Act (EISA)
•Energy Policy Act
•EO 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations
•EO 13045: Protection of Children From Environmental Health Risks and Safety Risks
•EO 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use
•Federal Food, Drug, and Cosmetic Act (FFDCA)
•Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
•Federal Water Pollution Control Amendments – See Clean Water Act
•Food Quality Protection Act (FQPA) – See FFDCA and FIFRA
•Marine Protection, Research, and Sanctuaries Act (MPRSA, also known as the Ocean Dumping Act)
•National Environmental Policy Act (NEPA)
•National Technology Transfer and Advancement Act (NTTAA)
•Noise Control Act
•Nuclear Waste Policy Act (NWPA)
•Occupational Safety and Health (OSHA)
•Ocean Dumping Act – See Marine Protection, Research, and Sanctuaries Act
•Oil Pollution Act (OPA)
•Pesticide Registration Improvement Act (PRIA) – See FIFRA
•Pollution Prevention Act (PPA)
•Resource Conservation and Recovery Act (RCRA)
•Safe Drinking Water Act (SDWA)
•Shore Protection Act (SPA)
•Superfund – See Comprehensive Environmental Response, Compensation, and Liability Act •Superfund Amendments and Reauthorization Act (SARA) – See Comprehensive Environmental Response, Compensation, and Liability Act
•Toxic Substances Control Act (TSCA)

Types of Environmental Insurance:

There are several types of policies that you can purchase depending upon the exposure you have.

One is called “site/location” specific EIL coverage. This has tailor-made coverages to deal with a specific location or project. The policy normally excludes any “know” exposures to loss.

Another contract that is available is Contractor’s EIL coverage that is for contractors that are in the business of pollution remediation.

Next there is coverage for Consultant’s E&O (Errors & Omissions) in the EIL sector of their professional advice.

Finally, you can design a module/component coverage type of policy depending on the pollution exposure you’re dealing with. Since 1986 the commercial general liability policy has continually inserted verbiage into the policies countrywide they exclude any and all pollution coverages. To strengthen their pollution exclusion contractual verbiage even more. Many of the carriers have put in very small sub limits, such as $5000, for each of the common pollution exposures. So while the carrier is relying on their pollution exclusion forms and endorsements, if some court found that there was some type of coverage the sub limit amount would limit the totality of the carrier’s loss exposure. Whether as a consultant, a contractor, or a landowner that has environmental liability exposures, there are insurance policies that are available to provide the needed protection.

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