It was recently announced that the Mourne Mountains gondola project would be put on pause after concerns expressed by the National Trust. According to the BBC, plans will be paused until the project, “receives robust and comprehensive environmental assessments on the proposals.”
In an interview with Insurance Business, Marc Loud (pictured), ACII and director at Park Insurance, said that the decision brings to light the huge risks of hazardous materials during planning stages: “Projects in environmentally sensitive areas like the Mourne Mountains - renowned for their ecological, hydrological, and cultural significance - must take extra care in accounting for hazardous materials during the planning stage.
“The threat of hazardous materials - such as industrial pollutants, toxic chemicals, and construction waste - has become a significantly more prominent consideration in risk assessments for development projects due to growing environmental and public health concerns.”
A report from Business Waste underscores the prominence of hazardous waste in development projects. According to the 2024 report: “Construction, demolition, and electronic waste make up 0.7 million tonnes of the UK’s total hazardous waste.”
These substances can pose significant risks to local ecosystems, Loud said: “Materials such as asbestos, heavy metals (e.g., lead, mercury, arsenic), or contaminants in previously industrial or undeveloped areas can be encountered,” he stressed.
For areas like the Mournes, Loud said there are specific considerations, particularly around “rainfall runoff and groundwater movement”.
He stated his belief that these projects should model:
• How construction could mobilise existing contaminants.
• The potential for hazardous waste to enter water supplies or protected habitats.
• Establish protocols for handling hazardous substances like fuel.
According to Loud, various forms of liability insurance should also be considered for development projects.
Firstly, he touched on environmental impairment liability insurance, noting that it, “covers pollution incidents (sudden or gradual), including cleanup costs.”
He also advised contractors’ pollution liability coverage, due to its specificity to construction contractors and the fact it covers, “pollution caused by construction activities, including improper disposal of waste.”
Loud added that public liability insurance with environmental endorsement should be an additional consideration as well, as it “covers third-party injury or property damage, with added protection for claims involving hazardous substances.”
Loud said that the environmental insurance landscape has drastically changed due to hazardous waste and there is now an “increased demand for coverage, expansion of policy offerings, higher premiums, and stricter underwriting.”
A 2024 report from Lockton shared that environmental liability pricing can vary greatly depending on the sector: “Environmental liability coverage and market conditions are highly individualised and driven by the insured’s specific characteristics. Buyers in more favourable or challenging industries, or with stronger or adverse loss histories, often experience results outside the norm.”
Business Waste’s 2024 report stated that the construction industry, specifically, is responsible for “62% of the UK's total waste and 32% of all waste sent to landfills.” Loud also emphasised the necessity of environmental liability insurance in this sector. “Environmental liability for hazardous materials can have major financial and operational impacts on project viability,” he said. “If not properly addressed, it can lead to unforeseen cleanup costs, regulatory penalties, legal action, loss of investor confidence, and significant project delays for construction companies.”
Loud also stated that legal action in relation to environmental pollution is a huge risk.
This was echoed in a November 2023 report from the consulting firm Milliman which shared that “10,000 PFAS suits filed against companies in 140 industries through late 2023 resulted in settlements totalling $16.7 billion.”
Loud said he believes that to mitigate risks, it is crucial to “conduct thorough environmental due diligence.”
He also noted the importance of environmental insurance and budgeting for contingencies.
According to Loud, brokers can also add value at each step of the planning process by:
• Recommending robust environmental due diligence.
• Identifying and explaining insurance coverage gaps.
• Advocating for site-specific endorsements and policy enhancements.
• Educating clients on legal liabilities.
Re-emphasising the importance of a broker’s role in planning, Loud said: “Brokers play a critical advisory role in helping clients uncover hidden environmental liabilities - especially those like historical contamination or buried hazardous materials that often remain undetected until after construction begins.”
