ABSTRACT
Environmental insurance can be considered to have come of age when it makes a positive contribution to the business cycle. Not only must it add value to deals when it is placed, but it must also be effective in responding to claims when it is called upon. Environmental insurance has certainly proved to be effective in facilitating deals, particularly mergers and acquisitions. Over the past three years, more than 500 environmental insurance policies have been placed in the London market. The income taken in insurance premium in the London market has doubled every year from £5m in 1998 to an estimated £40m in 2001. By contrast, the amount spent on environmental insurance premiums in the US is $1.3bn. Environmental insurance will have truly matured in the UK when there is a demonstrable claims history. To date there have been six claims. One was outside the cover provided, two were settled within the deductible layer, one is currently in dispute and two are being evaluated by the underwriter prior to settlement.
