Environmental insurance: prevent, avoid and repair

Environmental insurance: prevent, avoid and repair

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04.Aug.2020

Environmental insurance is becoming more and more important, especially as a result of greater environmental awareness.

“Whoever pollutes, pays.” This is basically the principle that governs environmental liability: the possibility of demanding the repair of any damage that may be caused to natural resources. It is wrong to think that the greatest risk to the environment is generated by large industries, since medium-sized or small companies also have the potential to damage nature at a cost way beyond their economic capacity.

Increased awareness

Hence, environmental insurance is becoming more and more important, especially as a result of greater environmental awareness and also thanks to the progressive tightening of laws aimed at protecting the natural environment.

Any professional or natural or legal person who carries out an economic activity is subject to this responsibility. However, Law 26/2007 on Environmental Responsibility indicates in which cases certain business activities are obliged to take out insurance to cover these possible damages. For example, waste management companies; landfills; water treatment companies; transportation of hazardous materials, and extractive industries, among many others.

Not just pollution

We usually associate the category of “environmental damage” with the damages caused exclusively by pollution. However, any type of significant damage to the soil, water, coastal strip and protected wild spaces and habitats can lead to liability: a fire, changes to the water table, problems arising in waste storage facilties, a parking lot that generates odors and diesel stains on the walls of an adjoining residential community, and so on.

Preventing greater evils

Through environmental insurance policies, insurers not only repair, restore or replace damaged natural resources, but also offer avoidance and prevention measures. Avoidance means that once the environmental damage has occurred, all the necessary measures are taken to prevent further damage. Preventive measures are aimed at advising the client company how to prevent any type of damage to the environment from occurring.

Protect the environment and protect your company

Having insurance of this type not only helps to repair any possible damage, but also guarantees that the company can continue with its activity. In many cases, when companies cannot meet the solvency requirements of the competent administration, they lose the administrative authorization to continue exercising their business and are even required to respond without limitation with their current and future personal assets.

It is clear that nobody wants to pollute, but accidents do happen. Relying on environmental insurance can be one way to protect the company and protect the environment in which it operates.

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