Environmental Impairment Liability Insurance
What Does Environmental Impairment Liability Insurance Mean?
Environmental impairment liability insurance (EIL) is a type of coverage designed for liabilities related to environmental damage or pollution. Companies that may face risks associated with pollution often purchase these policies. EIL provides coverage for accidental pollution resulting from normal operations, pollution arising from the products of the business, and other similar incidents that lead to environmental harm.
Insuranceopedia Explains Environmental Impairment Liability Insurance
Pollution can be extremely costly for a business. For instance, consider a gold mine that accidentally spills toxic substances into a river, causing pollution that contaminates riverfront property for miles. Such an incident could lead to millions of dollars in damages, and EIL insurance helps protect against the liability arising from these events.
On the other hand, some companies, such as organic farming businesses, may face a significantly reduced risk of pollution damage. These companies might not need to purchase environmental impairment liability insurance unless it is mandated by law.
