Pollution insurance—methods, coverage and beneficiaries under german policies

Abstract

German environmental liability law is characterised by a whole range of different liability provisions. These rules do not only establish a liability for the violation of individual rights due to environmental impacts, but also, since 2007, a liability under public law for damage to the environment. The new Environmental Damage Act (Umweltschadensgesetz, “USchadG”) not only gives rise to considerable and unpredictable liability risks for businesses, but also creates an additional need for adequate liability insurance coverage. This is because the conventional environmental liability insurance (Umwelthaftpflichtversicherung, “UHV”) did not provide cover for claims against companies for damage to flora, fauna, water and soil. For this reason, the so-called environmental damage insurance (Umweltschadensversicherung, “USV”)was launched on the market in 2007, which can at least partially cover liability under the USchadG. Nevertheless, environmental damage insurance policies only offer incomplete protection against official claims based on the USchadG (e.g. by excluding damage caused by normal operations), not least due to the difficulty of calculating environmental damage. The following article provides a brief overview of the main questions on German environmental liability law and corresponding insurance models.