Confusion reigns in Spain over environmental liability

The ACE study, carried out by TNS, revealed a significant lack of awareness of environmental legislation and risks that can affect their businesses as well as a lack of knowledge about the insurance protection available, said the insurer. ACE reported that the Business Environmental Liability study of over 700 Spanish companies showed that over half did not have specific environmental cover. “But more alarmingly, over 30% said they would not take any action to protect themselves against a possible environmental accident,” added ACE. The survey also found that, of those companies that said they had cover in place against environmental damage, only 10% had a policy that conformed to established regulations (Law 26/20071). This law was introduced on October 23 and regulates the responsibility of operators to prevent, avoid and repair environmental damage, in accordance with article 45 of the Constitution and the principles of prevention, explained ACE.hideThe law states that operators need to have recourse to a financial guarantee that allows them to cover the environmental liability inherent in their activities. The guarantee may be in the form of an insurance policy, collateral or the establishment of a technical reserve through the resources of an ad hoc fund backed by financial investments supported by the public sector. Respondents to the survey said, however, that they believed their multi-risk policy/financial guarantee, public liability and general business insurance policies would provide environmental risk protection. The survey found that that the general level of awareness of the Environmental Liability Directive (ELD) is low. Some 65% of those companies surveyed said they were unaware that the Spanish government could force them to set up a fund, collateral or insurance to cover their business against possible environmental damage. Some 66% of respondents said more could be done to provide information on environmental legislation. Only 18% of companies surveyed reported that they had received information from the government on this matter. Mariola Alfonso, leader of the TNS study said that: "Spanish companies are highly dedicated to the environment and are conscious of their role. However, there is a major lack of awareness about current environmental legislation, and companies would like more information. There are two sides to this situation because, in spite of the clear lack of awareness, there is also a positive attitude towards improvement, demonstrated by the fact that a third of the companies said they would be prepared to invest to protect the environment." The good news for the insurance companies is that some 43.1% of respondents said that insurance is the most likely form of environmental risk protection that they would consider. This was significantly ahead of other forms of protection, including technical reserving at 4.8% and collateral with 2.4%. Insurers also emerged as an important source of data on environmental liability, reported ACE. A third of respondents said they would look to insurers for information on the topic. Ángel Díaz, Managing Director of ACE Iberia said: "The study shows that as insurers we are both key providers of information and insurance against these risks, which is especially noticeable in sectors such as energy. These risks will affect all activities that could potentially damage the environment, such as waste and hazardous substance management, and those affected by the Law on Integrated Pollution Protection and Control."

Confusion reigns in Spain over environmental liability

Want to read this article?

Read Next

Marsh launches global alternative risk solutions practice

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

Marsh launches global alternative risk solutions practice

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

Want to read this article?

Read Next

Marsh launches global alternative risk solutions practice

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

Related Articles