Environmental Impairment Liability
Environmental Impairment Liability Insurance (also known as Pollution Liability Insurance or EIL Insurance) protects businesses from the legal, financial and clean-up costs resulting from pollution or environmental damage caused by their operations – whether accidental or gradual.
This cover goes beyond the limited pollution protection offered by standard public liability policies, helping businesses comply with environmental regulations and manage reputational risk.
What Does Environmental Impairment Liability Cover?
These policies typically provide cover businesses for the following.
Sudden and Accidental Pollution
Covers pollution events that occur unexpectedly (e.g. a burst fuel tank spilling into a watercourse)
Gradual Pollution
Covers long-term, slow-developing environmental harm (e.g. underground leakage contaminating soil over time)
Third-Party Bodily Injury and Property Damage
Legal liability for illness, injury or damage to third-party property caused by pollution
Clean-up and Remediation Costs
On-site and off-site clean-up costs, including environmental agency requirements
Legal Defence Costs
Defence costs associated with claims or regulatory action
Business Interruption (Optional)
Covers financial losses if pollution causes a shutdown or disruption to operations
First-Party Property Damage (Optional)
Covers damage to your own land or buildings as a result of pollution
Historical Pollution (Optional)
Covers pre-existing pollution conditions discovered during operations, subject to due diligence
Who Needs This Cover?
Environmental Impairment Liability Insurance is particularly important for businesses that
Use, store or transport hazardous materials
Own or operate industrial, waste or manufacturing sites
Have fuel tanks, chemical processes or discharge into waterways
Are responsible for large-scale construction, infrastructure or demolition projects
Need to meet regulatory or contractual environmental obligations
Environmental incidents can lead to high-cost claims, reputational damage and legal consequences. This insurance helps businesses respond quickly, meet legal obligations and minimise financial risk.
What a Claim Might Look Like
1. Fuel Spill into Watercourse
Scenario:
A company’s above-ground fuel tank develops a fault, leaking diesel into a nearby river.
Outcome:
EIL Insurance covers the clean-up, environmental fines and compensation to third parties affected.
2. Gradual Ground Contamination
Scenario:
A manufacturer discovers that a long-term chemical leak from old machinery has contaminated the soil beneath their factory.
Outcome:
The policy covers the cost of remediation, site testing and legal defence against enforcement action.
3. Neighbouring Property Damage
Scenario:
Construction works release contaminants into the groundwater, affecting a neighbouring farm’s water supply.
Outcome:
The policy covers compensation to the landowner and clean-up of the affected area.
4. Historical Pollution Discovered During Renovation
Scenario:
A developer begins construction on an old industrial site and uncovers asbestos and soil contamination from prior occupants.
Outcome:
Historical pollution cover (if included) pays for safe removal, soil treatment and regulatory compliance.
5. Regulatory Clean-Up Order
Scenario:
An environmental regulator orders a logistics company to remove and treat chemical run-off caused by heavy rain at a storage depot.
Outcome:
EIL Insurance covers clean-up, consultant fees and legal support.
We Would Love to Hear from You
Let’s talk about how we can improve your coverage, service, and premium. Simply fill in your details, and we will be in touch within 24 hours to see if we can help.