Aon has warned thatlow numbers of companies are efficiently assessing their environmental liability exposure.
Robert Martin, director of Aon Environmental Consulting and Solutions team, said: “Insufficient numbers of companies are efficiently assessing their real, potential and perceived environmental liability exposure."
Speaking at an AIRMIC Partners' Presentation Session on the environmental risk exposure facing businesses around the world, he said: "Even those businesses which do have pollution insurance under their public liability and general liability covers, and place reliance upon it, in actuality cannot be sure how effective that cover is as it has never been tested in a court of law
“Businesses need to make a start on understanding their environmental risk profiles. We are not suggesting that they need to rush out and buy environmental insurance rather that they establish the process to identify and evaluate their financial and brand name risk exposure as an integral part of their risk management programme and Corporate Governance Disclosure Reporting.
Martin continued: “At this time, the Environmental Liability Directive is being drafted into the laws of Member States, ahead of being enacted on 30 April 2007. We would urge as many companies as possible to engage in the consultation process that is to begin shortly in order to have their concerns and issues taken into account.
"This law is likely to impact SMEs in particular. Furthermore it may cause public liability and general liability insurers to reconsider whether they should now impose a total pollution exclusion. Currently, many questions remain unanswered and it will be too late if companies are reactive and sit back, waiting for the Directive to be implemented. Action needs to be taken now.”
