NGOs to insurance companies: do policies protect climate change deniers?

D&O policies may have gaping holes when it comes to protecting clients in the fossil fuels business, says Greenpeace.



Greenpeace International, World Wildlife Fund, and the Center for International Environmental Law (CIEL) have penned a letter to directors and officers of major fossil fuel companies and insurance corporations, asking who is responsible for litigation resulting from corporate inaction on climate change initiatives.

“The question that we want to know is whether the directors and officers at fossil fuel companies are at least considering whether their conduct is of the caliber that they are confident that it would be protected under their own D&O liability coverage,” said CIEL President and CEO Carroll Muffett.

He questions whether leaders within the fossil fuel industry are “taking decisions that could potentially expose them to future liability.”

“What we’re looking to understand from insurance companies is whether they would view their policies to extend coverage under these circumstances.”

Muffett notes that it was important to target the directors and officers directly to force them into considering their individual responsibility in the matter.

“Our sense is that it’s very easy to make decisions and continue to follow the status quo when you’re behind the corporate veil,” said Muffett.

“It’s a very different analysis when those responsible for making decisions begin to reflect: ‘could I myself be personally liable for decisions that we’re taking?’”

Muffett also feels that there is legal precedent that could prevent fossil fuel companies from receiving coverage from their respective insurance policies.

“I think the history of tobacco litigation and asbestos litigation is instructive here. If you look at the history of tobacco litigation and asbestos litigation, in both of those cases, there was a lot of skepticism about the idea that individual plaintiffs could prevail against insurance companies or against asbestos firms.”
He notes that such potential plaintiffs range from towns in Alaska displaced by environmental crises, retirees in Florida whose property values have fallen in value, and mayors rebuilding cities in the wake of natural disasters, such as Chicagoland, where “…their own insurers are denying them claims because climate change was foreseeable.”
Muffett explains that as the science and research on climate change becomes clearer and more precise, the risk of litigation is ever-rising.  
“If in fact the likelihood of litigation is increasing, are individual officers and executives behaving in such a way that climate realities are protected under their existing policies?”

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