Environmental risks, and their corresponding penalties and liability exposures, are increasing both in Australia and globally. The Asia Pacific region has recently seen legislative changes strengthening environmental penalties consequent on environmental damage and pollution, in some instances as a direct consequence of an increase in environment incidents and their severity.
In Australia, Environmental insurance has become far more prominent in response to the increasing environmental legislation and the new spectrum of risks and exposures faced by businesses. Insurers have begun to develop and offer new products to provide cover where traditional liability policies do not.
There are a multitude of genuinely different environmental insurance policies available and market capacity is increasing steadily. Yet there are currently no industry standards for the coverage offered in an environmental insurance policy. As a result, understanding what coverage is available and managing the resulting claims requires genuine expertise.
Environmental risk is an area of strength for W+K. Our team includes lawyers who have spent time in-house with insurers’ claims teams. We know the importance of proactively identifying and managing recovery claims to recoup first party payments made by our clients and delivering solutions geared to ensuring compliance with legislation and swiftly resolving reputational issues.
We regularly advise environmental insurers on a range of issues in relation to claims under on-site and contractors pollution liability policies including compliance, incident management, large scale investigations, responding to environmental enforcement action and managing corporate and executive officer liability. We work with a group of environmental experts who understand insurance issues and the relevant commercial drivers of insurers and their customers.
Some of our recent environmental experience includes:
- An environmental insurer in relation to a clean-up costs claim concerning one of the largest fuel spills in NSW (157,000 litres) and acting in the recovery against the maintenance contractor.
- Insurers with respect to a fuel spill from a tank farm in Darwin, including project managing the clean-up and reporting to, and obtaining requisite approvals from, the Northern Territory’s EPA. Also advising insurers on potential recovery options.
- An insurer in respect of coverage for an environmental clean-up claim brought against a service station in Western Australia. Fuel had escaped from an underground storage tank. We advised the insurer in respect of policy response. We also defended the claim brought against the insured before the Contaminated Sites Committee and other civil proceedings commenced against the insured.
- An insurer about a claim in excess of $1 million for clean up costs arising from a chemical spill which occurred when a train derailed in Queensland, including in relation to coverage, quantum and the insured’s liability.
- An EIL insurer about a claim in excess of $1 million for clean up costs arising from an oil leak at a plant, including advising on liability of insured and quantum.