Overview of Environmental Insurance Policies
Before delving into how environmental insurance policies respond in the event of a claim, it will be useful to provide a general overview of the primary products available in the marketplace.
Two basic forms of environmental insurance exist in the market today: site-specific pollution legal liability (PLL) coverage and contractor’s pollution liability (CPL) coverage. There are over 30 insurers that offer these basic forms, as well as some industry-specific versions of each. There are no standardized forms of these coverages. Each insurer has its own, distinct policy or set of policies. As a result, while the basic coverage elements of each are similar, the various coverage grants, definitions, exclusions, and conditions can differ markedly from policy to policy. In many cases, these forms can even be further manuscripted or endorsed on a risk-by-risk basis to either enhance coverage or to limit it.
Site-Specific Pollution Legal Liability (PLL)
A PLL policy is a claims-made insurance policy designed to address both historical (preexisting) or new environmental liabilities and contaminant releases associated with a specific site. Coverage may apply for sudden and accidental as well as gradual releases. It may be called an environmental impairment liability policy (EIL). The policy can provide protection for: