As larger companies pay more attention to the environment, smaller businesses also need to address whether environmental liability insurance should be part of their risk management plans.
San Diego, CA (PRWEB) April 11, 2013
Corporate giants like Apple and Walmart are paying more attention to their environmental impacts these days, says Steve Cohen on Huffington Post Blog. And not just for public relations reasons. The growing cost of energy, materials, and waste management, as well as the financial risk of defending environmental liability claims, have made it an economic imperative.
Marrs Maddocks & Associates, a San Diego insurance agency, believes that the need to protect against costly environmental claims extends to small- and medium-size businesses as well.
"As larger companies pay more attention to the environment, smaller businesses also need to address whether environmental liability insurance should be part of their risk management plans,” says Nancy Maddocks, agency principal for Marrs Maddocks. “Regular insurance policies do not cover environmental liabilities, and even one unprotected claim could put a small company out of business.”
Small and middle market companies are at risk for environmental liability for several reasons. Most small business owners don’t fully understand the risks involved. They believe that the type of business they conduct precludes them from any environmental liabilities. Or, they believe their existing liability policy will protect them against environmental claims. In most cases, this is not true.
Environmental liability is a specialty insurance product that must be purchased separately from the standard liability policy. Unless a company buys this specialty coverage, either separately or as part of their overall insurance package, they are not covered for environmental or pollution exposures.
Moreover, standard insurance policies specifically exclude coverage that addresses environmental liability and pollution events. Insurance carriers use “absolute” or “total” pollution exclusions to ensure that they are not responsible for covering environmentally related claims. And multiple court cases have upheld the wording and intent behind these exclusions.
To protect themselves, small business owners should make sure their insurance broker has experience and knowledge of environmental liability issues. Working together, they should determine the extent of the company’s environmental risks, and weigh that risk against the cost of coverage. If the risk is deemed sufficiently high, the business owner should obtain an environmental liability policy to protect the company against financial loss in the event of a claim.
“Every small businesses needs a risk management strategy,” adds Maddocks, “and that strategy should consider the full impact of an environmental claim or loss. While companies like Apple and Walmart can easily sustain multi-million dollar fines or penalties, smaller companies cannot. For many, the cost of an environmental liability policy may be the best investment they ever make.”
About Marrs Maddocks & Associates
Marrs Maddocks & Associates is an independent San Diego insurance agency with over 300 years of combined experience. Marrs Maddocks offers an educated, committed team that puts their clients first. They offer both business insurance and personal insurance from all of the major carriers. For more information, visit http://www.marrsmaddocks.com.