FINANCIAL RISK TRANSFER
One of the principal tools for managing risks has traditionally been the use of insurance. The experienct: of dealing with environmental risks via insurance has, however, not been universally successful. The view from the insured has often been that an insurer would require an expensive survey before insurance could be obtained, if contamination was found then cover would be refused, and if the site was clean - why was insurance needed anyway? From the insurer's point of view issues such as contaminated land posed particular difficulties, with an unclear regulatory framework behind a risk where realisation potential and cost were both very difficult to estimate. In addition, the damage might not be evident for a long period and it might be difficult to identify when it happened in the first instance. The unhappy experiences of US Environmental Impairment Liability (ElL) underwriters in the 1980s served to underline this caution.