Why You May Have More Insurance Coverage For Environmental Claims Than You Thought
A number of statutory provisions and common law theories are used to impose liability on businesses and individuals for past and present environmental claims, including strict, joint and several liability with very limited defenses. The legal bases include the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Resource Conservation and Recovery Act (RCRA), and various state strict liability statutes,1 as well as common law theories such as trespass, nuisance, negligence, and breach of contract (e.g., where there are environmental representations).2 The estimates of the financial burden of cleaning up such environmental claims are enormous, with one estimate of the total cost just to clean up abandoned hazardous waste [15-3] disposal sites ranging from $800 billion to $1 trillion.3 Individual sites can have cleanup costs ranging from hundreds of thousands to hundreds of millions of dollars. As a result, even a relatively small site cleanup can cause an individual or small business to face potential financial ruin. The potential availability of insurance to help pay some of these environmental costs should therefore be carefully examined.
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