Environmental liability insurance
Under the «polluter pays» principle, Spain’s Environmental Liability Act requires whoever causes environmental damage to prevent it, avoid it and repair it, and to bear the cost.
Environmental liability insurance protects a company’s assets when its activity causes damage to the environment or to third parties.
What it covers
Third-party damage
Personal injury and property damage occurring inside and outside the insured premises.
Damage to biodiversity
Repairing the damage caused to species and habitats.
Pollution in transit
Pollution arising from the transport of the company’s goods and waste.
Clean-up costs
For new pollution and environmental damage, inside and outside the premises.
Prevention and mitigation
The cost of preventing the damage or reducing it.
Business interruption
Losses when pollution forces the business to stop.
Defence and bail bonds
Legal defence and any bonds required.
Crisis containment
Support to manage the crisis caused by an environmental incident.
Cover, limits and deductibles vary from one policy to another.
Is a financial guarantee compulsory?
Who must have one
Companies subject to the industrial emissions (IPPC) or major-accident (SEVESO) rules, and category A waste facilities in the extractive industries.
For what amount
It is set by an environmental risk analysis, up to a maximum of €20 million.
Exemptions
Companies whose potential damage is assessed below €300,000 are exempt, or below €2,000,000 if they hold EMAS or ISO 14001. Even so, their liability remains strict and unlimited.
The guarantee can take the form of an insurance policy, a bank guarantee or a technical reserve. Source: Spanish Ministry for the Ecological Transition.
Could your activity affect the environment?
We review your situation and help you cover the environmental risk of your activity. No commitment.
What can happen
Spill into a river
A tank ruptures and releases waste into a nearby river: the spill has to be contained, the riverbed cleaned and the damage to biodiversity repaired.
Soil contamination
A leak at a facility contaminates the soil on the site and on neighbouring land.
Frequently asked questions
How is it different from general liability?
General liability covers damage to third parties. Environmental liability also covers damage to the environment itself —water, soil, species and habitats—, which the law requires to be repaired even if no third party has been harmed.
Is my company required to have a financial guarantee?
Companies subject to the IPPC or SEVESO rules and category A extractive waste facilities are, unless an exemption by amount applies. Other activities can take it out voluntarily.
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