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London, 13 November 2014Insurance for Construction - Environmental and Pollution Liabilities

Insurance for Construction - Environmental and Pollution Liabilities

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Construction activities, especially on brownfield sites, have significant potential to cause adverse environmental impacts through pollution and/or release of existing contamination.

Examples of typical causes are:

  • Handling and storage of fuels, solvents and other harmful substances at work sites
  • Impact on Controlled Waters by surface water run-off into watercourses and soaking of pollutants into groundwater
  • Creation of migration pathways for existing contamination by piling or excavating through impermeable ground
  • Mobilisation of existing contamination by dewatering
  • Disturbance of asbestos or lead paint through demolition/renovation activities

This could result in responsible parties facing liabilities as a result of:

  • Third party claims for bodily injury, property damage, loss of use of assets/ business interruption, common law nuisance, etc. (tort liability)
  • Regulatory actions to clean up the pollution/ contamination and/or abate the resulting statutory/public nuisance (statutory liability
  • Under National Laws implementing the EU Environmental Liability Directive, responsible parties could also face obligations as an “operator” to prevent and remediate serious environmental damage and to restore the environment (especially biodiversity/natural resources) to its pre-damaged state (environmental damage liability)

Whilst tort liability usually requires fault and/ or foreseeability on the part of the polluter, statutory liability (including environmental damage liability) is mainly strict.

The main responsible party will usually be the contractor (as “the polluter”), but developers and site owners/employers can also potentially face liabilities where construction activities cause environmental impacts.

For further information download the Environmental and Pollution Liabilities.pdf

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