Environmental Liability Insurance
Coverage for pollution events, environmental damage, and cleanup costs for businesses handling hazardous materials.
Why Environmental Liability Insurance Matters
With strict liability laws and penalties up to $5 million for companies, environmental insurance is essential for businesses handling hazardous materials.
3,200
Deaths per year in Australia linked to air pollution
$6.2B
Estimated annual cost of pollution-related health impacts
$5M
Maximum fine for companies in NSW for pollution events
The maximum penalties in NSW are now up to 7 years in jail, $5 Million in fines for a company and $1 Million per person, with similar penalties in other states and territories.
This is a strict liability law, so there are really no excuses if pollution occurs. Standard business liability policies typically exclude or provide only limited cover for pollution events.
The usual public and products liability business insurance only provides limited cover for sudden and accidental pollution events. It won't cover your business or the directors and managers for allegations or actual environmental harm from gradual leaks or contamination that happens over time.
Three Main Types of Coverage
Fixed-Site Pollution Legal Liability (PLL)
For Business Premises
Protects businesses against liability and costs resulting from pollution "at, on, under or migrating from" specified locations. Ideal for businesses operating from fixed premises.
Who Needs This:
Property owners, manufacturers, warehouses, service stations, dry cleaners, and any business using or storing chemicals
Contractors' Pollution Liability (CPL)
For Mobile Operations
Protects businesses from liability and costs stemming from pollution caused by specified contracting activities. Suits companies operating on third-party sites.
Who Needs This:
Construction companies, earthmoving contractors, waste management, environmental consultants, and trades working on customer sites
Environmental Insurance for M&A
For Property Transactions
Designed for property and mergers & acquisitions deals, protecting sellers and buyers against the financial impact of unknown pollution that pre-dates the transaction.
Who Needs This:
Property buyers, sellers, real estate developers, and companies involved in business acquisitions
What Environmental Insurance Covers
Covered Costs
- Cleanup costs (typically up to $1 million+)
- Legal costs and defence expenses
- Technical reports and expert consultations
- Third-party bodily injury claims
- Third-party property damage
- Loss of profits during remediation
Covered Events
- Gradual pollution and contamination
- Sudden and accidental spills
- Underground storage tank leaks
- Chemical releases during operations
- Historic contamination discoveries
- Off-site migration of pollutants
Critical Gap Filled
Standard business insurance excludes environmental harm from gradual leaks or contamination over time, leaving significant exposure for directors and managers.
Who Should Consider This Insurance?
Any business that owns or rents land is exposed to environmental liability, as there is no way of knowing what took place on the property prior to your occupancy.
Manufacturing Facilities
Chemical processing, production plants
Service Stations
Fuel storage and distribution
Waste Management
Collection, processing, disposal
Construction
Earthmoving, excavation, demolition
Mining Operations
Extraction and processing activities
Dry Cleaners
Chemical solvents and cleaning agents
Property Owners
Commercial and industrial real estate
Storage Facilities
Warehouses with chemical storage
Transport Companies
Hazardous materials transport
Regulatory Requirements
Coal Seam Gas Operations
Existing and new coal seam gas operations are required to prove to the EPA their financial arrangements to cover the costs of unexpected potential pollution incidents during the lifetime of the project. Companies must prove adequate insurance coverage or alternative financial arrangements annually and on commencement of new activities.
EPA Focus Areas
While Environmental Liability Insurance has traditionally been directed at large industrial manufacturers, many states' environmental protection agencies (EPA) are now focused on medium and small businesses.
In NSW, the EPA has stated in their 2020 Annual Report that they are focused on 'escalating compliance and enforcement actions', demonstrating increased scrutiny across all business sizes.
Our Underwriting Partners
We partner with specialized environmental insurance underwriters:
Allied World Insurance
Comprehensive environmental liability solutions for Australian businesses
Liberty Specialty Markets
Environmental risk insurance with extensive industry experience
Chubb Insurance
Environmental insurance for pollution liability and cleanup costs
QBE Insurance
Environmental impairment liability coverage for various industries
Zurich Australia
Pollution liability insurance with global expertise
Allianz Commercial
Environmental risk solutions tailored to Australian regulations
The Cost of Not Having Coverage
Cleanup Costs
Environmental cleanup costs can easily reach $1 million or more, depending on the severity and extent of contamination. Without insurance, these costs come directly from your business assets.
Legal Penalties
Maximum penalties of $5 million for companies and $1 million per individual, plus potential criminal charges with up to 7 years imprisonment for serious violations.
Protect Your Business from Environmental Risks
Don't face severe penalties and cleanup costs alone. Get comprehensive environmental liability insurance tailored to your operations.