Since the entry into force of Law 26/2007 on Environmental Liability, adapting European regulations to Spanish legislation, the rules applicable to companies that pollute or damage the environment have been tightened. Today we will see what the law says, and how solutions are offered from the insurance world to protect these risks that increasingly have more economic and social impact.
In its day we talked about the necessary insurances for a company. Today we will expand this information with this insurance that, with the economic recovery, is booming.
How is Environmental Responsibility?
The Spanish legal system provides clear guidelines as to what will be required of polluting companies:
- An administrative responsibility: in case of damage to nature, the Administration will be the one to demand a solution from the company causing the damage, the “operator”.
- This liability may be unlimited; no maximums are established. Specifically, the law states: “to bear its costs, whatever the amount”.
- It will be objective for all those companies that are included in Annex III of the aforementioned Law (i.e., no infringement or fault will be required, but in the event of contamination, they will be directly liable). For other companies it will be subjective.
- There is a subsidiary liability of the administrators of these companies, so that they can go to jail for this type of actions.
How do companies act before and after environmental damage?
Law 16/2007 requires that the companies affected by it, which are the vast majority, must:
“To adopt and implement measures to prevent, avoid and repair environmental damage”.
Many companies think that, because they are not large corporations that constantly emit pollution, they are not exposed to this risk. An incident that can happen to anyone is an undetected leak from your diesel tank, which can leak into the subsoil and end up in a stream, damaging it and potentially affecting crops or even water for human or industrial consumption.
There are, therefore, two fundamental legs, which must go hand in hand:
- Responsible preventive action: which may involve hiring a specialized consulting firm to minimize these risks in our company.
- Take out an environmental insurance policy: although there are other financial guarantees, this is the most economical and the one that actually transfers the risk of indemnities and expenses to a third party.
In this way, we already have it perfectly covered before and any type of incident that could affect us in the future, protected.
When an accident occurs, we must try to minimize the consequences, first of all by informing the company, who will help us through their technical specialists to control the damage and minimize the environmental impact. There are companies that even offer guarantees to clean up the company’s image through advertising campaigns.
Conclusions on environmental insurance
As an insurance broker, we must be as well informed as possible of all the risks that “threaten” a company. Therefore, at the very least, we must:
- inform employers of the existence of this Law,
- to talk to them about the consequences for their company if such an event occurs, and
- how this impact can be minimized.
After attending numerous lectures on this type of risks, we can conclude that, if such an event occurs, there is no small claim. All the expenses that are generated from: hiring of specialized companies to detect leaks, minimization plan and repair of the generated damages, legal defense, etc.; are very, very important.
Therefore, we are at your disposal to inform you about the cost of transferring this risk to a company. If your company deals with waste, chemicals or has a fire risk, you should at least find out about environmental insurance. Contact us and we will advise you, without obligation.
