Business leaders should be aware that prior to 1973, environmental contamination was covered by most general liability policies. The transition from little or no exclusionary language began in 1973, when insurance companies began utilizing qualified pollution exclusions to actively discourage pollution of the environment. Following the passage of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), known more commonly as Superfund, in 1980, general liability insurance policies began to discontinue coverage of pollution related incidents. This trend accelerated following the passage of the Superfund Amendments and Reauthorization Act (SARA) in 1986, due to the insurance industry’s concerns over the strengthened strict liability provisions within the amendments. This form of social policy was in response to the burgeoning environmental movement of the 1970’s, which saw the passage of the Clean Water Act, the National Environmental Policy Act, the Clean Air Act, and the creation of the Environmental Protection Agency. All of these legislative and administrative acts resulted in a vacuum for environmental issues in the insurance world. Therefore, increasingly, between 1973 and the passage of SARA in 1986, new insurance policies adopted qualified or complete pollution exemption provisions.
Following the 1986 SARA amendments, complete pollution exclusion provisions were written into most, if not all, general liability insurance policies. Therefore, a new form of insurance, commonly known as environmental insurance was created in order to address the needs of industries with potential pollution related liabilities. In the following weeks we will post blogs on mining historical insurance policies for coverage and the forms of environmental insurance currently available.
If you have questions concerning environmental insurance, please contact Thorn & Associates at 773-609-5320, firstname.lastname@example.org, or through our web contact form.
Disclaimer: This article cannot, and does not, create any attorney/client or consultant/client relationship.