Environmental Liability: Protect Your Business and the Environment (Law 26/2007)
The Liability Insurance policy offers companies the possibility of transferring their exposures.
It is based on the principle of 'the polluter pays' and covers the prevention and remediation of damage caused to natural resources, such as water, soil, riverbanks, species, and protected habitats.
- In this context, companies operating in sectors with potential environmental impact—such as waste management, industrial activities, or renewable energies — should consider this policy as an essential element, not only to ensure regulatory compliance but also to safeguard their financial stability in the event of an environmental incident.
Accidental Pollution vs. Environmental Liability: What Each Policy Covers
- Accidental Pollution (General Liability/ Pollution Liability): focuses on damages to third parties (people or property) and contractual clean-up costs. It covers expenses arising from a sudden and accidental event: compensation for damages caused to third parties (people, property, fauna, flora), mitigation costs, legal defense, etc.
Environmental Liability (Law 26/2007)
There are occasions when it is difficult to determine whether pollution originated from a sudden and accidental event or from a gradual process.
Environmental Liability policies cover both types of pollution events, meaning both gradual pollution and accidental pollution. They include primary, complementary, and compensatory remediation, both for damages outside the facilities and within them. In other words, they guarantee:
COVERAGES:
- The remediation of damage to natural resources
- Loss prevention expenses
- Clean-up and prevention costs
- Possible own damages resulting from such pollution. That is, it offers coverage for new legal requirements (new methods to clean and remediate environmental damages) not contemplated in the Accidental Pollution coverage.
In summary, Environmental Liability provides coverage for new legal requirements (new methods to clean and remediate environmental damages) not included in Accidental Pollution coverage, which is very limited in scope.
Who is Obliged? Sectors and Activities under Regulatory Focus
- SEVESO (major accidents involving hazardous substances)
Operators subject to Seveso thresholds (storage/use of hazardous substances). Always top priority.
- IPPC/IED (Integrated Environmental Authorisation - IEA)
Installations subject to Integrated Environmental Authorisation: Energy/combustion ≥ 50 MW, refineries/coking plants, gasification, metallurgy, minerals (cement, lime, glass, ceramics), chemicals, pulp and paper, textiles and tanning, large-scale food and beverage production, solvent treatment, intensive pig and poultry farming (IED threshold).
- Waste Management
Incineration, recovery/disposal (hazardous and non-hazardous) and landfills (including post-closure).
- Mining and extractive industries
Exploitation, dams, and mining waste ponds.
- Water and discharges
Abstractions/diversions and discharges subject to authorisation in Public Hydraulic Domain or coastal areas.
- Pipeline transport and on-site handling of hazardous substances; biocides/pesticides (non-agro-forestry uses)
Activities with inherent risk due to handling and movement of substances.
If your activity appears in these lists or you handle hazardous substances, it is highly likely that you must assess your risk and establish a financial guarantee.
We help you set the limit, choose the modality, and process the documentation before the Administration.
How We Work at Jhasa
Review of the Regulatory Perimeter (Seveso, IED/IPPC, waste, mining, Public Hydraulic Domain/coastal…). Preparation of the market submission with quantified scenarios.
Fine-tuning between policies to avoid overlaps or gaps. Adjustment of definitions (sudden vs. gradual event), retroactivity, territorial scope, and sub-limits.
Expert assessment and technical defense in claims Access to environmental experts and our in-house legal team to argue coverage and optimise response before the Administration.
Our legal/environmental and expert team allows us to speak the language of both the regulator and the insurer. This translates into better terms and shorter timelines.
At JHASA, we provide tailored Environmental Liability solutions for companies and projects across various sectors, aligning with Spain’s Law 26/2007 and the ‘polluter pays’ framework to prevent and remediate damage to natural resources - covering both sudden and gradual pollution - so you gain regulatory confidence and financial protection.
Contact us today and discover how we can help you quantify your environmental exposures, set the appropriate financial guarantee, and optimise compliance with customised Environmental Liability programmes.