Marine based businesses are being advised to review their insurance cover in the light of current and on-going legislation relating to incidents of pollution of controlled waters. Marinas, moorings and boatyard operators, as well as contractors working in such locations, are particularly at risk given their proximity to controlled waters and the processes and materials they use in their business.
Mark Elcocks, Specialist Risks Manager with Marine Trade Insurance specialists IRCM said “Whilst a Marine Trade Insurance policy may provide some cover under the Public Liability section of the policy it is usually pretty basic and unlikely to afford much in the way of significant protection to policyholders. Pollution, accidental or otherwise, can arise from fuel spillage or loss, antifouling and painting activities as well as sewage disposal arrangements to name just a handful of hazards”.
Most Marine Trade policies will only provide cover relating to liabilities arising from a sudden accident – in other words they will not cover any loss arising from a gradual leak of, for example, fuel from a bunded tank. They will also usually exclude losses arising from incidents relating to handling, storing or processing of any waste materials or substances. Clean-up costs are also normally excluded.
Mark went on to say “It’s possible that a standard trader’s policy could pick up some of the liabilities arising from an incident but these could prove minimal in comparison with the total cost to a business. There have been cases where the media has reported relatively low third party losses and even fines. What they often neglect to report is investigation costs, fish restocking costs and other remedial action offending businesses incur. The costs to a business resulting from such fines and orders can run to 6 figures and directors could also be held personally liable”.
Businesses are advised to conduct appropriate risk assessments and implement satisfactory containment systems and contingency plans coupled with the right practices. They are also advised to check the scope of their insurance cover – standard Marine Trades policies will almost certainly exclude cover for the exposures that could result in a business or company director being seriously penalised – and boost the scope of their protection with an Environmental Liability policy.
Mark Elcocks again: “tailored cover is available that can fill the gaps in protection left by a standard policy. Cover options can include remediation costs imposed by regulators, gradual as well as sudden pollution, first party business interruption, legal costs and expenses as well as third party liabilities.”
For further information on protecting your business and your personal assets from losses arising from pollution telephone Mark Elcocks on 01902 796 793 or email markelcocks@marineinsurance-ircm.co.uk