Brokers urged to offer guidance on environmental liability

Brokers are not doing enough to protect their clients from falling foul of a new EU environmental ruling, Biba has warned.

To raise awareness, Biba will hold a seminar at its conference next month and launch an online product within the next few weeks.

The concerns are related to the environmental liability directive (ELD) which came into force in England last month – although separate legislation will rubber-stamp it in Scotland, Wales and Northern Ireland later this year.

Under ELD rules, any firm that causes pollution will not only have to clean up the mess – which is currently how it stands – but also spend thousands, possibly millions, repairing or changing another location as recompense.

The scope of the ELD is wide, meaning SMEs that buy contaminated property could also face penalties.

Tony Lennon, manager of Chubb environmental solutions, has been holding workshops around the country.

Lennon said: “The vast majority of the UK is SME and most of that is at the small end of the SME. If you found that 60% of the UK had not heard of the environmental liability directive, I would not be surprised.”

A spokesman for the Association of Insurance and Risk Managers (AIRMIC) said its own members, from larger companies, would be familiar with the ELD but for SME it was likely to be a “totally different story”.

Steve Foulsham, technical services manager at Biba, said other areas of insurance, such as public liability, were unlikely to cover the ELD because of case law.

Anthony Dickinson, market services manager at the International Underwriting Association said: “A lot of companies are under-insured because they have not appreciated the implications of the environmental liability directive. There’s undoubtedly a role here for brokers to educate and guide their customers, especially in the SME sector.”