The concept of environmental liability must be clearly understood, especially by those who run a company or are responsible for its main activities. Below we review the key points and alternatives for keeping environmental liability under control.
What Is Environmental Liability?
First, it should be noted that this is a specific form of liability. Liability establishes the obligation of an individual or legal entity to answer for damage caused to third parties.
If someone is responsible for causing damage by action or omission, they must face the consequences. On the one hand, they must try to reverse the damage and return the situation to its previous state, where this is possible. On the other hand, they must compensate those who have been harmed.
Environmental liability falls within administrative liability. In many cases, a particular private interest may be affected, but the basic difference compared with other types of liability is that environmental damage generally affects everyone within a given jurisdiction. For this reason, the public administration may require this type of liability to be assumed.
What Is Environmental Liability Damage?
Broadly speaking, damage occurs when, through the action or omission of an individual or legal entity, a natural resource is harmed. This can include soil contamination, contamination of bodies of water and their banks, and other damage caused to plant or animal species or ecosystems.
Activities Subject to Environmental Liability
Many economic activities carried out by professional operators may give rise to liability. They are listed in Annex III of Spanish Law 26/2007 on Environmental Liability.
They mainly include waste management, discharges into the terrestrial and maritime public domain, water abstraction, handling and transport of substances considered dangerous or polluting, and the use of genetically modified microorganisms.
What Cover Do Insurance Policies Offer in These Situations?
Since the polluter pays and this administrative liability is, by definition, unlimited, insurance policies provide covers that offer security in different scenarios. Prevention and mitigation of the damage caused are fundamental.
The most relevant cover focuses on repairing the damage. Other covers may also be included, such as legal defence expenses or the costs of cleaning up the pollution caused.
Environmental liability is an essential contribution to society. For safety reasons, some operators are legally required to have insurance adapted to the ecological risk level of their business activity. For others, this insurance is highly advisable.