GL TRENDS UPDATE
Environmental liability
Legislative change in New Zealand
Pollution and contamination issues create real risks for businesses in Australia across almost all industries. Material harm from pollution or contamination can occur on-site, as well as in the environment beyond the premises where the pollution incident occurred. Insureds face a wide array of environmental liability risks, which can arise from current or previous occupiers’ activities. Exposures can include emergency response costs, clean-up costs, bodily injury, property damage, nuisance claims, damage to biodiversity, fines and reputational damage. The number of environmental prosecutions is increasing, particularly in the mining and waste industries where the risks are high. We are also seeing some organisations being investigated based on lower thresholds. As managing pollution remains a focus for governments at all levels, we expect to see the legislative and regulatory framework evolve to address this serious issue. With regulatory activity on the rise, having appropriate environmental liability coverage in place remains a critical risk management strategy for many businesses.
Legislative change in New Zealand New Zealand’s environmental legislation, the Resource Management Act 1991 , is being overhauled. The new regime will focus on achieving “environmental bottom lines” to be set by central government. One of the New Zealand Government’s express policy objectives is to increase the scope and severity of enforcement to deter offenders. We expect the new legislation will lead to an increase in both frequency and quantum of environmental liability claims.
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