All entities should carry out an environmental risk assessment so that they understand how their business processes impact the environment now and whether they are going to be able to afford the unexpected additional costs of environmental “reinstatement” (repair) that are insurable.
A skilled insurance broker would advise that Environmental Insurance must be investigated because it is a common exclusion from every insurance policy. Once an environmental assessment has been conducted, an environmental insurance policy can commonly be arranged.
Knowing which environmental risks are insurable and which are not can guide you about the activities that your business may choose to maintain or cease.
And isn’t that our environmental responsibility anyway? To undertake only those activities that affect our environment in a way that is rectifiable and accounted for?
The key is to plan ahead and not to wait until the irreversible environmental damage occurs. That way we don’t have the outcome of the environmental disaster in the Gulf of Mexico in 2010 all over again, where the largest oil spill in history was not remediable from funds accessible through environmental insurance.
The public should be demanding that those who carry out environmentally sensitive activities be insured if they can and if not, that they do not do what they intended before they sought insurance advice about it.
The public should also be demanding that insurance brokers as a profession be well prepared to discuss environmental risk and the potential sources of cover to insure against environmental damage.
Until then, Environmental Insurance is well equipped to approach these problems for businesses across Australia.
