Are your clients adequately protected in respect of their environmental liabilities? In response to feedback from our brokers, Yutree have done some work to ensure that our liability policies are flexible enough to help you to protect your clients in this area.
The landmark case of Bartoline Ltd v Royal & Sun Alliance (2006) highlighted the limitations of pollution coverage under a public liability insurance policy.
Bartonline, an adhesives manufacturer, suffered a fire at their premises. Foam used by the fire brigade to put out the fire, along with some chemicals which leaked as a result of the fire, entered an adjacent watercourse causing pollution.
What costs did the client incur?
The Environment Agency has the power, under The Water Resources Act 1991, to recover the costs from the polluter that they incur in mitigating pollution. They can also issue a Works Notice on the polluter to make them carry out further remedial work if required. Bartoline incurred costs of c£150,000 in complying with the Works Notice and were invoiced by the Environment Agency for a further amount of over £600,000 of expenses.
Why did the insurance not respond?
Royal & Sun Alliance turned down Bartoline’s public liability claim and Bartoline subsequently issued proceedings against them for breach of contract. Their policy provided an indemnity against legal liability for damages. The judge concluded that the word “damages” did not cover costs arising from the Environment Agency exercising their powers under The Water Resources Act 1991. There was, therefore, no ‘legal liability for damages’ as required by the policy wording and therefore the insurer was within their rights to reject a claim for costs incurred through complying with a statutory notice.
How can Yutree help you to protect your clients?
We have negotiated with our liability insurers and can now consider a Bartonline (or Pollution Clean-up Costs) extension to the public liability section on all of our contracts. To consider this extension we would need to know your client’s proximity to any watercourses.
A quote from one of our brokers on the exposures faced by their clients:
“Hugh J Boswell recognise the considerable exposure faced by our commercial clients with regard to pollution clean-up costs and always recommend that the policy be extended to include Bartoline cover” – Rachele Kelsall ACII, Head of Community Broking, Hugh J Boswell
If you would like to discuss this matter further, require this extension or would like to see a copy of wording then please do get in touch with me on 01638 675992 or e-mail me at firstname.lastname@example.orgThank you, as always, for your continued support.