Pollution liability insurance is known as pollution incidents in the insurance world. There is a thought to suggest that this insurance policy came into picture following the great amount of asbestos litigation in the 1970s. It was around that time that insurers thought it better to do away with pollution liability insurance in general policies and instead offer it independently.
Pollution liability insurance protects you in two ways: one is when the pollution takes place on your property; the other is when you suffer losses resulting from pollution on somebody else’s property. In such cases, it is the insurer’s responsibility to recover costs from the party that caused the incident. Conversely, your policy pays for damages you may cause to other properties.
The most general use of pollution insurance is to protect lenders, buyers and sellers in property transactions. Conventionally, buyers do hire environmental consultants to assess sites. That may take a little over twenty days and cost up to $5,000. Concomitant to the delay, there is another major danger in this. Consultants opine on the current condition of the site and not what may happen in the future.
Pollution liability insurance, on the other hand, guards the insured for the entire term of the policy, including for any later discovery of damage. The policies are largely renewable and can be in place for up to ten years. Also, these policies are a lot more cost effective than a site assessment.
Pollution liability insurance is doubtless a useful and an economically viable way of managing environmental risks. It can be particularly beneficial to those companies that deal with materials that may be considered as pollutants once released into the environment.