In Insurance policies, the General Liability Section typically contains a Pollution Exclusion for bodily injury or property damage arising from your operations, whether onsite or offsite or for pollution spills or seepage emanating from your owned premises. Likewise, your property policy usually only has a small extension (if any) for pollution-type spill cleanup on your own property.

You may not be aware of environmental law and how it could have repercussions for you. “The subject of environmental regulation and environmental law in Canada is interesting. The polluter-pay principle is firmly entrenched in environmental law in Canada by assigning companies that pollute the responsibility for remedying contamination for which they are responsible. “ ¹  Therefore, it is beneficial to get familiar with the law.  

Basic environmental insurance coverage includes Third-party liability, cleanup costs, emergency radiation costs, and incidental transit (transportation coverage for automobiles that pick up waste, products or materials and transport them).

 Examples:

https://www.victorinsurance.ca/en/pl/resources/claims-examples/claims-examples-environmental-liability.html

• bodily injury and property damage arising from a pollution event – oil, hydraulic fluid, gas, or diesel tanks that you take on or puncture at another party’s site
• pollution from waste materials on your own property – oil, hydraulic fluid, gas, or diesel tanks on site

You can experience the following negative impacts on your company:

-Cleanup costs if the property becomes contaminated: https://www.canadianunderwriter.ca/features/pollution-solution/

-Damage to a third party

-Fines and penalties 

-Crisis management expenses – for adverse reactions by the public

Pollution incidents can cause multiple problems. Negative publicity, cost, and time dealing with the situation can affect your business adversely.   Environmental cleanup and liability coverage is essential to help offset these impacts.  

Steps you can take:

• Review your risk management policy and consider how environmental insurance could be part of your program.
• Review your insurance coverage(s) and ensure the appropriate exposure risks are included.
• Speak to OTC Insurance about coverage appropriate for you

1 Paul Granda, Gowling Lafleur Henderson LLP, “Overview of Canadian environmental law: A potential for liability and insurance coverage issues,” 2021, Victor Insurance Managers Inc