Is environmental liability insurance compulsory?

Environmental liability insurance is not a legal requirement, but does provide peace of mind if you operate a business in an industry that is at high-risk of causing contamination or pollution. Some insurers will include EIL as part of a farm insurance policy for businesses working in the agriculture sector.

Do I need environmental liability insurance?

As with most insurances, there is no legal requirement to hold EIL cover and people can choose to self-insure. However, land owners and businesses are liable for flora and fauna damage in the event of a pollution incident. If cover is not in place, the Environment Agency will use their statutory powers to clean up and will charge the landowner under the ‘polluter pays’ principle.

Will environmental liability insurance cover my property if its damaged?

Environmental impairment liability insurance is designed to cover the clean up costs of your land but not the property and this will usually be covered under your buildings insurance or farm policy. Third-party property and land is covered.

Can I still purchase environmental liability insurance if my land has been previously contaminated?

Yes, but any previous pollution will be excluded. However, if it has been cleared away by professionals then cover could be sought. It will, of course, be dependent on what happened and any remedial work undertaken. Insurers will review each situation individually. An insurance broker can help you present these in the most beneficial way.

What information or documents do I need to provide when purchasing an environmental liability policy?

Underwriters will need to know various details regarding the risk, including any history of incidents that could give rise to a loss, your business description, details of any storage tanks, and anything else that may affect your exposure to a pollution event. Your broker will work with you to gather and present the necessary information.

Can I purchase environmental liability insurance as a standalone policy?

Absolutely. While many farm insurance policies will include EIL cover as standard, EIL cover can be purchased for any industry or business which bears risk of a pollution incident.

Does environmental liability insurance cover environmental damage?

Yes, environmental liability insurance provides cover for environmental damage. Standalone policies have a limit of indemnity of up to £5million, while our farm insurance includes a limit of £2million.

Environmental Impairment Insurance

Name: Environmental Impairment Liability Insurance
Brand: Alan Boswell Group
Rating: 4.9 (1420 reviews)

Environmental Impairment Liability Insurance

Cover for the financial losses associated with pollution-related damages or clean-up costs, safeguarding businesses against potential environmental liabilities.

Offensive odour

Oil storage pollution

Noise pollution

Fly-tipping on your property

Environmental impairment liability insurance (EIL) provides cover for the legal, clean-up, and reinstatement costs following a pollution incident. Although it doesn’t cover fines, it can cover third-party costs for damage to neighbouring land, and potentially compensation for any loss of business suffered as a result.

The Alan Boswell Group Difference

Environmental impairment insurance is often included in a standard farm insurance policy, but it is not a risk unique to farms. Any business that stores or uses potential pollutants should consider maintaining EIL cover.

Alan Boswell Group are experts in EIL insurance, helping you understand your exposures and providing the right cover to offer you the most appropriate protection.

Environmental Impairment Liability Insurance

Spot on with communication and assistance.

Mr Wells - Farmers Combined Insurance

4.9/5 1420 reviews

EIL insurance in detail

Since changes to the Environmental Protection Act in 1990, any damage caused to the environment is the liability of the polluter. This is the ‘polluter pays‘ principle. Where multiple parties are involved in a project, every party has a duty of care to ensure that their business activities do not cause environmental damage.

And, while public liability insurance still covers pollution caused by a sudden, identifiable, unintended, and unexpected incident, this can leave you unwittingly exposed as environmental damage can often happen gradually over a period of weeks, months, or even years.

Environmental impairment liability insurance (EIL) is designed to cover the cost of any clean up and / or third-party claims and includes:

Legal defence

In case your business is accused of causing environmental harm, this insurance covers the legal cost of defending against such claims. For example, if your company is blamed for a chemical spill, the insurance would help pay for lawyers and legal proceedings.

Environmental clean-ups

If your business activities result in pollution or contamination, this insurance covers the costs of cleaning up the environment. This is crucial for incidents like oil spills or hazardous waste leaks, where clean-up can be extensive and expensive.

Reversal of damage to biodiversity

This covers efforts to restore natural habitats or wildlife affected by your business’ activities. If, say, your operations inadvertently harm a local ecosystem, the insurance can fund restoration projects to bring back the area's natural balance.

Compensation to third-parties for bodily injury or loss of business

If your business’ environmental impact causes injury to people or affects other businesses (such as through water contamination affecting a nearby farm), this insurance helps pay compensation to those affected.

Repair of third-party property

If your business causes environmental damage that results in property damage to others (like chemical seepage damaging a neighboring property), this insurance helps cover the costs of repairs or compensation.

EIL insurance is the most comprehensive policy available for businesses to protect themselves against the cost of claims for pollution.

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The Alan Boswell Group Difference