Aon Risk Solutions
Environmental Services Group
A Business Guide to the European Union Environmental Liability Directive
Risk. Reinsurance. Human Resources.
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Bridging the Gap in Corporate Environmental Programs
A Business Guide to the European Union Environmental Liability Directive
The Environmental Liability Directive (2004/35/EC) is a legislative act of the European Union creating new and significant potential liabilities for costs, damages and losses for operators and companies regulated by the ELD. All EU members have now adopted the ELD into their national laws, making compliance unavoidable for companies operating in EU member states, regardless of where they are headquartered.
Remediation Costs Can Be Severe The Importance of Insurance
Environmental fines and litigation costs can be considerable, including time and resources. Information on ELD costs are gathered on an ad-hoc basis because Europe currently does not have a central database to track ELD loss and damage. However, while it’s still too early to confirm, the costs associated with Natural Resource Damage claims in the U.S. are expected to increase significantly. It is critical to have a professionally designed risk prevention and mitigation program in order to protect a company’s brand.
Financial security plays an important role in the ELD. Currently, eight EU member states have committed to imposing mandatory financial requirements on operators, and more member states are expected to join. In these member states, insurance – among other instruments – is accepted as financial security. In some member states, the adoption of the ELD is backdated to April 30, 2007, and this should operate as the assumed date for the purpose of insurance retroactive dates for all member states.
The High Costs of Environmental Damage
A recent investigation by the French government examined two incidents. When they occurred in 1996 and 1997, the cost of the environmental clean-up was...