Canadian companies will find it harder to get environmental insurance coverage, due to an increase both in the number of claims and the size of claims.
Despite more insurers than ever offering environmental liability insurance, the appetite for challenging risks is falling due to more stringent cleanup standards and more aggressive pursuit of persons responsible for pollution incidents.
Insurers are also less likely to offer coverage in excess of an indemnity for known pollution conditions. Cleanup costs are also rising, forcing companies to review their limits, especially for portfolio and multi-year policies.
These were all findings in the Canada Insurance Market Report 2016 released by
Marsh.
The company noted that one growing environmental issue is the excessive use of road salt, which can be washed away by rain or melted snow, contaminating lakes, streams, and ground water. In some areas, the salt levels in bodies of water are high enough to harm plants, fish, and other aquatic life. Although companies should ensure that their road salt application practices are commensurate to their “slip and fall” exposure, they should also be more mindful about the creation of pollution conditions which may result to additional cleanup costs in the future, Marsh said.
