Environmental Impairment Liability (EIL) Insurance Risk Assessment Surveys

Abstract

The market for Environmental Impairment Liability (EIL) insurance has developed over the past ten years. The first step in the evolution of the market took place in the early 1970s when underwriters excluded non-sudden, accidental environmental occurrences from coverage under Comprehensive General Liability (CGL) insurance-policies. Initially, this action had only a limited impact as most companies did not focus on the extent of their financial risks as a result of this exclusion. In recent years, however, scientists have increasingly linked exposure to certain chemicals and chemical wastes to adverse environmental and human health effects; and the public’s awareness of the potential dangers of hazardous substances to health and the environment has risen drastically, fueled by a series of front-page stories of innocent victims of alleged toxic wrongs. As a result, corporate risk managers have become more concerned about the significance of this exclusion.