ABSTRACT
Environmental insurance in the United Kingdom has grown rapidly in maturity, diversity and capacity in the past 10 years, mirroring the growth in environmental legislation. In areas where the law is undeveloped, damages and liability are difficult to establish. For example, with the introduction of the superfund legislation in the United States, new liabilities emerged. At that time, general liability policies in the US and UK did not recognise pollution as a potential liability and insurers did not collect premiums to cover the claims which emerged. This resulted in massive losses for the primary insurers and re-insurers and led to a retrenchment within the industry. In the US, general liability policies excluded all pollution based claims and, in the UK in 1991, the Association of British Insurers introduced the pollution exclusion into public liability policies. This excluded all claims for property damage and injury arising from pollution, except for cases where the pollution was sudden, accidental and unintended. So, by 1991 there was no insurance cover available in the UK for historically contaminated sites and for pollution which emerged gradually. The response from the insurance industry, and especially brokers, was to seek specialist environmental insurance to meet the needs of industry and commerce.
