ABSTRACT
This chapter examines the effectiveness of tort law in deterring behavior that gives rise to toxic injuries and in compensating victims of that behavior. It explores the extent to which insurance assists or impedes the deterrence of harm caused by toxic substances. The chapter also examines the influence of increasing tort liability on the operation of the market for insurance. It shows that information plays a crucial role in determining the behavior of the parties to toxic injuries and in determining the role played by insurance. The chapter reviews one of the information problems: what is the state of our scientific knowledge regarding the harm caused to humans, to other species, or to the environment generally by exposure to different quantities of the hundreds of toxic substances that are currently a matter of concern? Liability insurance provided by a fully-informed insurer could give rise to a risk-rating system that induced the injurer to take full precautions.
