We’ve seen news reports in recent years about the costs of environmental liability for businesses that must pay hefty fines and clean-up costs for water pollution. Recently, XTO Energy, a subsidiary of Exxonmobil, reached an agreement with the U.S. Environmental Protection Agency to pay $2.3 million in fines and another $3 million to clean the waterway it polluted.
When considering marine business insurance, marine business owners need to analyze risk exposure like an environmental strategist.
Typically, the focus is on clean-up costs in the event of a spill or wreckage that releases toxic pollutants. While this is important, it’s not the only risk for liability. There are many other considerations for claims and costs should your marine business be involved with any incident that leaves you opento to damages. These include third party:
These are not the only potential costs that could be included in marine business insurance coverage. After an accident or mishap that has implications for the environment, there will inevitably be costs for legal defense, environmental investigations, and potentially even public relations management.
Every marine business owner needs to take the time to consider and analyze the unique risk for environmental exposure faced by their business, be it a marina, boatyard, manufacturer, or charter company. Is it worth the risk of having to pay out of pocket for environmental liability and clean-up should something go wrong? Is it feasible to expect the business to survive the financial hit this would entail? Or should you acquire comprehensive environmental liability insurance that is designed to cover the actual risk faced by the business?
The reality is that every marine business owner could be impacted by environmental exposure. It is important to properly assess risk and take steps to have a strategic plan in place to respond should the situation ever arise.
Need help determining environmental liability risk for your marine business? Contact the knowledgeable and experienced marine insurance professionals at Global Marine Insurance for proven expertise.