You don't need to run a factory to need environmental liability insurance - Blog

By Staebler Insurance On Apr 27, 2017

In this day and age, we're all environmentally aware. There are (thankfully) very few people out there who refuse to acknowledge the importance of preserving our natural resources and protecting the environment we live in. That said, unfortunate accidents still happen, and when they do, businesses need to be held accountable.

Both the size and frequency of fines, legal fees, and judgments as a result of environmental liability issues have grown considerably over the past decade. These are costs that can easily shutter a business but the underlying risk factors are still often underestimated or misunderstood by business owners. While manufacturing and industrial businesses are likely to have already considered some kind of pollution coverage or spill protection, they may not be aware of the full scope of their obligations and potential liability. Part of this confusion is due to the fact that there is no such thing as "environmental law” to point to and mark off like a checklist. Instead, there is a number of regulations, policies, statutes,  and guidelines that vary depending on locations, industry, scale, and the exact nature of a business.

Manufacturing businesses have obvious, and not so obvious responsibilities. The safe containment of hazardous or explosive fuels, chemicals, and materials are a given, as is the safe disposal of waste. But what about shipments to and from their business? What about ensuring that the products produced meet standards and regulations across different provincial and state regulations? Contractors have similar concerns. The regulations and expectations that need to be followed change from job to job. The demands are different depending on the work, from excavation to underground wiring, to working on septic and sanitary systems, to demolition and so on. Having one standard policy is unlikely to cover the myriad of different tasks and jobs a busy contractor crew will need to work on.

Keeping track of these responsibilities can be difficult under the best of circumstance but they are even less well understood in industries outside of what we'd generally consider posing an environmental risk. Any business, no matter how seemingly benign, that needs to tend a large grounds or work with chemicals on a regular basis can benefit from a policy that will protect them in the event of an accident or unexpected development.

Think about a golf course. The back nine doesn’t exactly spring to mind when you picture "environmental risk”, does it? But the more you consider it, the more risk factors the typical club faces. After all, you need to keep that fairway green and lush right? For any golf course that's going to mean serious landscaping, ongoing maintenance and pesticides. Are you storing fuel for mowers on site? What about the chemicals used in those pesticides? Is the pest control company you've hired properly licensed and insured? Do you have any kind of on-site pest management systems? Are animals like ducks and geese making a home out of your water traps? These can all be avenues for potential environmental concerns.

If your business faces any concerns like these, an environmental impairment liability policy can protect you. Consult with an expert who has in-depth knowledge of the regulations and guidelines applicable, previous case studies, and can accurately assess your risk factors and the potential for liability.

A good assessment does more than identify potential issues, it can help provide simple and cost-effective solutions to decrease that risk and lower your liability. Simple additions such as spill kits, additional emergency alarms, tighter maintenance and testing standards, or the addition of secondary containers of shielding around tanks can all offset both your found liability in the event of an accident, and the cost of your environmental impairment liability policy. 

Being responsible about your environmental liability isn't just about being a good citizen of the planet, it's also about being a good business owner. Make sure you know your risks and have an environmental impairment liability policy in place that will protect you in the event of an accident.