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Environmental Liability

Every business should understand and plan for pollution.

Many of us consider pollution risks to be limited to the realms of big business and heavy industries. We’ve all heard the horror stories of expensive clean-ups in the news, like the Rena ship grounding, that cost its Greek owners over $235 Million. But it might be something you should think about again, before dismissing it as not a problem for your business.

 Any time a business or tenant’s operation is required to comply with the Environmental Protection Agency’s HAZNO storage regulations, there is a potential for a major loss should those hazardous substances escape.

Good risk management practices are your first line of defence, but what about oversights or human error?

We know of a large Australian loss where chemicals were stored in accordance with State regulations, which included a substantial bund wall; however, who would have anticipated the bund overflowing from the fireman’s hoses as they desperately tried to extinguish a blaze?

What about asbestos or gradual seepage that’s gone unnoticed for years? Surely you can blame the previous landlord or tenant – isn’t that an adequate defence? Unfortunately not! New Zealand’s Resource Management Act imposes strict liability on pollutants, whereby you are guilty even if there was no intent, and normal proof of negligence is not a requirement. A defence can include your responsible conduct and quick remedies, but at what cost? A simple slow drip down the storm water drain can result in thousands of dollars in clean-up and ecological remedial costs.

Emerging environmental safety hazards to be aware of:

  1. New asbestos handling regulations
  2. Increased fines and penalties under the Resource Management Act (RMA)
  3. Contractual requirements for insurance coverage for the use and storage of hazardous substances
  4. Gaps in traditional liability policies where cover is limited to sudden, rather than gradual events, with no cover for lost income.

New Environmental & Pollution Liability Cover for SMEs

There’s a new product – Environmental & Pollution Liability – designed especially for SMEs offering more cover than ever before:

  1. Gradual event cover (as well as sudden/accidental events)
  2. Asbestos contamination
  3. Specific site cover and mobile contracting options
  4. Transport-related pollution liability
  5. Civil claims (as well as criminal liability)
  6. Environmental damages
  7. Emergency response and clean-up costs
  8. Defence costs included in policy limits
  9. Resultant business interruption.

Cover and claims support is backed by environmental experts who can act swiftly to help you manage a pollution crisis. We think this cover is a must, even if you only store low levels of hazardous substances, or if you own a site where your tenants use hazardous materials.