Limiting Your Environmental
Exposure.
Environmental Impairment
Liability Insurance (EIL)
POLLUTION INSURANCE
Ray Butchart, CCIB, CIP
Ward Watkins Insurance Brokers (Surrey) Ltd.
5746 176A Street, Surrey, BC V3S 4H2
(604) 576-6761
What is the definition of
“Environmental Impairment”
(a) Bodily injury; (including sickness and disease)
(b) Property damage;
(c) Interference with or reduction of any
environmental right or amenity protected by law;
(d) Liability to “Clean Up” outside the premises of the
insured; arising out of any and all emissions,
discharges, dispersals, disposals, seepages,
releases or escapes of any liquids, solids, gaseous,
or thermal irritants or the generation of smells,
noises, vibrations, light, electricity, radiation,
changes in temperature or any other sensory
phenomena.
Some Examples of claim or
potential claims
• Damage to the site or drill hole from a spill of a foreign
substance such as Gas, Diesel Fuel or Hydraulic Oil etc.
• Uncontrolled surface water discharge releasing sediments and
contaminants onto adjacent properties/waterways.
• Contamination to ground water at the drill site or adjacent site
also to include ground water drawdown.
• General nuisance, noise or change in third party environment..
• Smells and sensory phenomena as well as interference with or
reduction of any right or amenity protected by law.
• Release of oils/fuels/chemicals from on-site storage tanks or
other usage (weather related, vandalism, rupture).
THE MAJORITY OF CLAIM PAYMENTS ARE DEFENSEORIENTED IN NATURE.
More Examples…
• In July 2007, a BC municipality hired a road
contractor to perform routine maintenance.
During the course of performing the road
repair, the contractor ruptured a pipeline,
resulting in a crude oil geyser discharging
product into the nearby Burrard Inlet and
surrounding residential community for 30 to
60 minutes before being capped;
Exxon Valdes (Alaska) & BP
Drill Rig Fire in Gulf of Mexico
British Petroleum (BP) has reached a
$7.8 billion settlement with the plaintiffs’
steering committee (PSC) for the
economic loss and medical claims
stemming from 2010 Deepwater
Horizon accident and oil spill.
The settlement is subject to final written
agreement.
Why do I need it?
• Canada’s federal and provincial
regulatory systems have adopted
statutes designed to promote
environmental responsibility and
stewardship.
• POLLUTER PAYS.
• PROPERTY OWNER IS RESPONSIBLE
FOR CLEANING UP THE SITE (even if
they did not cause the pollution in the
first place).
Most businesses carry
Comprehensive General Liability
Insurance (CGL) and/or Automobile
Insurance (ICBC)
• Pre 1966 CGL did not exclude pollution
• 1970’s CGL underwriters quickly excluded
or restricted coverage for pollution under
their policies.
• EIL coverage is available but is
underwritten and a specific premium
charged.
More and More Property Owners,
Contractors, Municipalities,
Consultants etc. are requesting
this form of coverage to get their
business.
TIP
Use your EIL coverage
as a marketing tool to get
jobs and protect your
assets.
RISK REDUCTION OPTIONS:
• Self Insurance;
• Avoidance;
• Risk Control/Engineering;
• Contractual transfer:
– Most commonly used environmental risk
management tool
• Risk Transfer (EIL Insurance)
Premium is based on:
• Limit of Liability ($5,000,000)
• Description of Drilling Operations &
Experience
• Revenue and years of Experience
• Retention/Deductible
EIL Points
• Coverage is available at a reasonable
cost.
• Claim must occur during the policy
period.
• Application is easy to complete.
• Coverage is for Compensatory
damages. No coverage for fines or
penalties.
Questions & Answers