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Insurance coverage for environmental loss

On Behalf of | May 9, 2023 | Insurance Disputes

California businesses are becoming more vigilant about making sure their insurance covers all kinds of problems. In recent years, that has centered on wildfires, business interruption coverage after the health crisis and the recent heavy storms that unexpectedly hit the state.

There are other types of insurance that business owners might not immediately consider essential until they find they need it.

Environmental loss insurance could be necessary for California businesses

Business owners learn to expect the unexpected. Still, there are aspects of being fully protected that might escape their notice. It is difficult to account for every possible pitfall and that is specifically the case with environmental challenges that might come up.

Environmental insurance is used to cover for loss or damage that comes about if polluting elements are unexpectedly released.

A clearer way to describe it for laypeople who are unfamiliar with this type of coverage is “pollution insurance.” Since most insurance policies do not have this coverage, businesses might need to purchase it separately.

With California so heavily invested in finding clean energy sources and protecting the environment, environmental exposure from a business could be exorbitant. This applies to businesses that use chemicals, have storage tanks above ground, paints and other items that can cause damage to the environment. A company that manufactures products is especially in jeopardy.

Many businesses do not realize how vulnerable they can be if they do not have environmental loss coverage. There is no current law requiring that they buy it in California, but for their own protection, it might be wise to consider it. If people are injured, property is damaged or there is a business interruption, a business could be obligated to pay out of pocket. For small and midsize businesses, this could hinder their operations or shut them down completely.

Many businesses have been irretrievably damaged by unexpected catastrophes and problems that could have been avoided had they purchased the proper insurance coverage. In some instances, they had insurance and the company balked at paying what they were supposed to using questionable tactics.

The financial and legal issues involved are complex, and it is wise for business leaders to learn all they can about environmental loss insurance.