Environmental Impairment Liability
What Does Environmental Impairment Liability Mean?
Environmental impairment liability refers to a charge against a person or entity whose business activities have caused damage to the natural environment, including organisms and vital life forms protected by environmental laws. This liability may be covered by the insurance policy of the individual or entity involved.
Insuranceopedia Explains Environmental Impairment Liability
Certain businesses have the potential to damage or pollute the environment. For example, mining, if not properly monitored, can lead to the release of toxins into the surrounding area. Specifically, coal mining for energy has caused significant environmental damage in the past. Therefore, thorough precautions and specific standards are implemented before coal mining operations begin.
One precaution is to purchase an environmental impairment liability policy, which protects the owner or organization initiating such business activities in the event of pollution or environmental damage caused by their operations. This policy will cover the costs associated with the environmental damage resulting from the business activities.
