Environmental Damage Insurance
Environmental damage can occur unexpectedly at any location where you’re active. Even a seemingly minor incident, like extinguishing a fire, can lead to significant pollution from contaminated firefighting water.
This pollution can cause costly damage, for which you as a business owner are responsible for the cleanup costs. To avoid unexpected financial risks, you can opt for environmental insurance.
What is Environmental Damage Insurance?
Environmental Damage Insurance, also known as Environmental Insurance, covers the costs of remediation and investigation when your company is responsible for environmental damage, both on your premises and at other locations.
This also includes coverage for damage caused by solar panel particles after a fire, leaking battery storage systems, and other environmental hazards, even if the cause is beyond your control or if the damage on your premises is caused by another party.
With environmental insurance, you protect your business from the financial consequences of environmental damage, allowing you to operate with peace of mind.
What Does Environmental Insurance Cover?
An environmental insurance policy typically covers:
- Remediation and Investigation Costs for cleaning up contaminated soil or water, on your own premises or that of others if harmful substances enter unexpectedly the soil or surface water, even if caused by someone else.
- Costs for removing and disposing of suddenly released asbestos.
- investigation costs to determine the extent of the contamination.
- Mitigation Costs to prevent or reduce further damage.
- Legal Costs arising from environmental damage.
- Material Damage resulting from contamination or remediation, including repairing or replacing underground pipes, cables, paving, and landscaping.
- Business Interruption; coverage for fixed costs and lost profits during business closure for remediation.
What Does Environmental Insurance Not Cover?
Not everything is covered by environmental insurance. Below are some items that are generally not covered:
- Environmental damage that you caused intentionally
- Air pollution
- Pollution that was already present before the insurance started
- Personal injury and environmental damage due to storage of hazardous substances in underground tanks
- If you did not comply with laws, decisions, guidelines, or conditions
- Pollution that occurs during work on water bodies
Be sure to check what the insurance covers and excludes. There are significant differences between insurers.
Who Should Consider Environmental Damage Insurance?
Environmental insurance is intended for companies in the solar energy sector that are at risk of environmental damage, such as:
- Owners of Operational PV Installations
This insurance provides coverage for damage caused by solar panel particles after a fire or leaking transformers or batteries.
- Companies in the Solar Panel Trade
For example, wholesalers, distribution centers, and logistics storage facilities. Ensure that damage from solar panel particles is well insured after a fire.
Examples of Environmental Damage for Companies in the Solar Energy Sector:
Soil Contamination from Leaking Batteries at a Solar Park
During an inspection, it was discovered that some batteries from the energy storage system were leaking. These leaks led to soil contamination on the solar park’s premises. The cost to remediate the contaminated soil was €15,000.00. These costs are covered by environmental insurance.
Soil Contamination from Solar Panel Particles After a Fire
After a major fire in a building with a large solar panel installation on the roof, many solar panels were damaged, releasing solar panel particles that spread across the area. The cost to clean up these particles and remediate the contaminated soil was €25,000.00. These costs are fully covered by environmental insurance.
Asbestos Contamination After a Fire from Solar Power Installation
A fire from a solar power installation released asbestos, contaminating the premises and surrounding agricultural land. The environmental insurance covers not only the costs of cleaning up the asbestos (€20,000.00) but also the costs of lost agricultural products contaminated by the asbestos (€10,000.00).
How Much Does Environmental Damage Insurance Cost?
The cost of your premium depends on various factors, including:
- Your chosen liability limit
- Your business activities
- The presence of hazardous substances or asbestos
- Any additional coverages chosen
In general, the greater the risk, the higher the premium. For an exact quote, it is advisable to request an offer from an insurer through us.
What to Do After a Loss?
- Record the date and time of the incident.
- Report the damage as soon as possible.
- Take measures to prevent further damage.
- Keep receipts for the costs of any measures.
- Do not dispose of damaged parts until they have been cleared by the insurer.
- Take clear photos of the damage.
To report a claim or for more information on the next steps, visit our informative claim reporting page. Learn more about reporting claims!
What Other Insurances Do I need Besides Environmental Damage Insurance?
In addition to environmental insurance, entrepreneurs often take out the following insurances:
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Frequently Asked Questions
Yes, however, business liability insurance has limited cover for environmental damage. It is a standard coverage.
You are insured for:
- Sudden environmental contamination that you have caused. In this case, only the damage to persons caused by the contamination is covered.
- Sudden environmental contamination caused by a defect in your product. In this case, only damage to others’ property is covered.
All other damage is not covered. Think, for example, of damage that occurs gradually, such as from a leaking transformer that pollutes the ground over the years. For these types of risks, you need Environmental Damage Insurance.
Yes, typically there is a deductible ranging from €250.00 to €1,500.00 per claim.
Contact us immediately. We will assist you with the claims process and, if necessary, involve a claims expert.
No, but it may be required by your client or financier.
For insurance purposes, “environmental damage” refers to significant harm to soil, water, and nature. Environmental damage to nature involves harm to protected species and natural habitats.
