Seguros y pensiones para todos

Sustainability assured through environmental insurance

Environmental insurance not only repairs, restores or replaces damaged natural resources, but also proposes avoidance and prevention measures

Home > Blog > Sustainability assured through environmental insurance

14.Mar.2022

Lately, environmental insurance has been booming, not only because there is greater awareness of the issue, but also because there has been a significant tightening of regulations and compliance criteria to ensure increased environmental protection.
 
However, there are still many erroneous beliefs hanging over this issue. For example, there is a tendency to think that it is only large industries that could cause enough damage to nature to require this type of insurance. However, the truth is that any professional or natural or legal person who carries out an economic activity is subject to this responsibility. That is why, in order to clarify the concepts involved, the first thing we need to know is what exactly we mean when we talk about “environmental damage”:

What is environmental damage?

This is any significant damage caused to the soil, water, coastline, protected spaces or wildlife habitats. In other words, this damage does not only refer to the pollution that an industry can produce, which is the way we typically think about it, but it can also be related to a fire, to changes in the water table, to poorly managed waste, odors, stains, and so on.

Obviously, some activities involve a higher risk than others of producing this type of damage. That is why Law 26/2007 on Environmental Responsibility indicates in which cases certain business activities are obliged to take out insurance to cover this possible damage: waste management companies; landfills; water treatment plants; businesses that transport hazardous materials; and extractive industries, as well as many others.

Repair, restore, replace, avoid and prevent

Environmental insurance not only repairs, restores or replaces damaged natural resources, but also proposes avoidance and prevention measures. In other words, once the damage to the environment has occurred, the insurance company takes all the steps necessary to prevent further damage. In addition, insurance companies advise their clients on how to prevent any type of environmental damage from occurring in the first place.

When companies are unable to meet the solvency requirements of the competent authorities, they could lose the administrative authorization to continue their business activity. They may even have to cover any damage with their present and future personal assets. Having an insurance of this type provides additional protection to allow them to keep operating while respecting the environment.

You may also like…

It is now possible to insure your cryptocurrency investment

It is now possible to insure your cryptocurrency investment

Volatile currency But why is this type of currency riskier? Firstly, because these currencies are particularly volatile and there is a high level of speculation in the market where they operate. This means that the people who invest in them can potentially make a lot...

Insurtech: from a trend to a booming reality

Insurtech: from a trend to a booming reality

Predicting risk All these technologies have generated a huge and continuous stream of connections and information that allows insurance companies to analyze our parameters related to health, driving, travel, home maintenance, and so on. Thanks to the predictive...

Children and money: should they get an allowance?

Children and money: should they get an allowance?

And it is normal to worry about this. Some people want to wait until their children are older to teach them everything to do with money, others believe that these skills related to their financial intelligence should be enhanced from an early age and, of course, there...

Does home insurance cover solar panels?

Does home insurance cover solar panels?

Buildings or contents insurance? But do you know whether these photovoltaic installations are covered by your home insurance? If the solar panels are fixed, they are considered permanent electrical energy installations and, for this reason, they fall within your...

What is cashback and how to take advantage of it?

What is cashback and how to take advantage of it?

In this article we explain what cashback actually is and how to benefit from it without falling into the trap. What is cashback? We can define cashback as a system through which you are paid a percentage of the money you spend when you buy certain products. In other...