Environmental Impairment Liability Insurance (EIL)

Environmental Insurance deals with insuring pollution related loss exposures. There are many ways to legally be exposed to environmental loss. Negligence is one area. Negligence refers to the inability to use the usual, customary, and reasonable care required for this type of situation. Intentional torts and civil wrongs can also result in liability exposures. Inherent legal liability in the environment area is imposed by statute, environmental laws and ordinances of the federal, state, and local governments. Contractual obligations and commitments can also impose legal liability. Here’s a list of important executive orders and environmental laws that small businesses need to comply with.

These are summaries of Environmental Laws & Executive Orders.

These laws and EOs are designed to protect the environment and human health. The EPA is responsible for administering any or all of these.

• 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)

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• 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)

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• 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)

There are many types of environmental insurance:

Depending on the amount of exposure, there are many types of policies you can choose from.

One is called “site/location” specific EIL coverage. This policy can be tailored to cover a particular location or project. Normally, the policy does not cover “know” loss exposures.

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

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

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Finally, you have the option to design your own module/component coverage type of policy depending on the pollution exposure you’re dealing with. Since 1986, the commercial general policy has included language in all policies. It excludes any and all pollutants. To increase their exclusion contractual verbiage. For the most common pollutants, many carriers have placed very low sub limits (e.g. $5000) While the carrier relies on their endorsements and pollution exclusion forms, a court could find that the sub limit amount was sufficient to limit the carrier’s total loss exposure. There are insurance policies available that can provide protection for consultants, contractors, and landowners who have environmental liability exposures.