Environmental Insurance
What is Environmental Insurance?
Environmental insurance policies are designed to address the various financial losses that can occur from a pollution or contamination incident. These can include:
- Compensation to third parties for injury and property damage
- Clean-up costs, including third-party claims and statutory clean-up notices
- Civil fines and penalties
- Legal defense costs
- Natural resource damages
- Emergency response costs
Why is Environmental Insurance Important?
Environmental insurance is becoming a basic coverage requirement for manufacturers, utilities, property owners, developers, contractors and environmental consultants. As the variety and number of pollution risks increase — and, in many cases, coverage for environmental loss is excluded from, or is restricted by, standard property and casualty policies in regions including the U.S. and Europe — the need for environmental insurance is becoming more important.
More recently, we have seen organizations looking at environmental insurance with a fresh perspective as they consider how insurance products may complement their objectives related to environmental, social and governance (ESG) issues and in response to climate-related risks and losses.
Environmental insurance can be highly customizable. Among the various products available are:
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Environmental Site Liability
Environmental Site Liability (ESL) — or Pollution Legal Liability (PLL) — covers first- and third-party environmental risk stemming from owned real estate or property and operating facilities.
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Contractors Pollution Liability
Contractors Pollution Liability (CPL) covers all contraction operations on a project or practice basis. Wrap-up programs are also available for construction projects covering all contractors at all tiers. Options to add E&O coverage to the policy are available in the marketplace.
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Combined General Liability
Combined General Liability with CPL, ESL/PLL and Professional coverage are available for a wide range of manufacturing and construction clients, bridging the gap in general liability coverage caused by pollution exclusions.
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Financial Responsibility Policies
Financial Responsibility Policies, including above-ground and underground storage tank policies.
How Aon Can Help
The key to accessing the needed capacity for environmental insurance is understanding the risk and coordinating brokerage teams to get the most out of the market. By engaging in product development and strategically deploying capacity, Aon’s Environmental Risk Solutions team offers a range of exclusive products:
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Aon Environmental Edge
Originally developed in 2008 to provide corporate veil protection for financial institutions and private equity clients, Aon Environmental Edge is a high-capacity coverage to fill the gaps left by subsidiary entities' primary environmental and general liability insurance programs. It has provided global protection for our largest financial institutions’ clients.
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Aon Power Wrap
Power and utility companies often buy time element and/or named perils pollution coverage on a combined general liability form that may have ambiguities regarding certain aspects of the environmental coverage. Aon Power Wrap provides pollution coverage with clarity and sits differences in conditions/differences in limits to the primary combined form.
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Aon Asbestos Products Pollution Liability (APPL)
Developed specifically for M&A clients, it is a value-creation tool designed to cover third-party bodily injury claims arising from asbestos products post-1980.
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Cantilever Excess Liability
The Cantilever product was designed specifically for Class I railroads and provides excess capacity for sudden and accidental pollution above the general liability tower of a railroad client on a quota-share basis.
In addition to continuous investment in new ideas and solutions, clients working with Aon’s Environmental Risk Solutions also benefit from a deep bench of professionals experienced in the areas of environmental engineering, underwriting and claims/litigation support.
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