Environmental Liability Insurance Research Articles

A multiagent collaborative development strategy for environmental pollution liability insurance based on an evolutionary game

AbstractTo improve the problem of environmental pollution liability insurance, this paper constructs an evolutionary game model based on the government, insurance companies, and polluting enterprises. The findings indicate that in an imperfect market, penalty and subsidy mechanisms boost insurance rates. Reinsurance facilitates insurer underwriting, prompting gradual government withdrawal. Effective pricing mechanisms by insurance companies enhance environmental liability insurance operations amid evolving market mechanisms, offering theoretical guidance for addressing challenges in implementing such insurance.

Effects of environmental liability insurance on illegal pollutant discharge of heavy polluting enterprises: Emission reduction incentives or pollution protector?

This paper discusses the impact of environmental liability insurance (ELI) on illegal pollution discharge (ILD). ILD was measured by the diurnal pollution coefficient of variation at the monitoring station nearest to the heavily polluting enterprise. Results show that: (1) Compared with firms that do not participate in ELI, ELI can inhibit ILD by 0.24 %. (2) Impact paths mainly include pollution prevention, production, emission and supervision effects. On the one hand, ELI can aggravate ILD by weakening environmental responsibility and increasing management costs, on the other hand, ELI can also curb ILD by increasing environmental protection investment and government punishment. (3) ELI is more able to suppress ILD of state-owned enterprises and large-scale firms, while ELD aggravates ILD of labor-intensive firms. (4) Peer effect of ELI in the same region is more obvious. This paper aims to provide insurance implications for restraining ILD.

The Inaction in Climate Change Adaptation and Mitigation in Sub-Saharan Africa: Some Policy and Legal Issues

This article seeks to examine as to how relevant environmental policy and legal principles deal with adaptation and mitigation challenges posed by climate change in Sub-Saharan Africa. It reviews and analyzes relevant provisions and processes of the UN Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol, the Paris Agreement as well as other relevant principles such as common but differentiated responsibility and respective capability (CBDRRC) and binding emission reduction targets. The Sub-Saharan Africa’s attempts to adapt to and mitigate the effects of climate change are reviewed along with the challenges in the region including the urgent need for climate financing. It concludes by urging the creation of a separate department of climate change by the Sub-Saharan African States, the implementation of environmental liability insurance, the revitalization of the West African power pool project, and the creation of a robust financial mechanism under the Paris Agreement for adaptation and mitigation policies in the Sub-Saharan Africa.

Environmental pollution liability insurance and green innovation of enterprises: Incentive tools or self-interest means?

The existing theoretical research on environmental liability insurance mainly focuses on system construction, development status and other aspects, and mainly consists of normative research, with relatively little empirical research. This paper uses empirical research methods to explore the impact of environmental liability insurance on the green innovation of enterprises and examines the driving role of environmental liability insurance in green innovation from the perspective of green governance. This paper, based on the list of enterprises purchasing environmental pollution liability insurance (EPLI) as published by the Ministry of Ecology and Environment, explores the impact of EPLI on the green innovation of enterprises. It is found that purchasing EPLI can significantly improve the green innovation of enterprises. The effect path test shows that EPLI can promote the green innovation of enterprises by relaxing financing constraints and reducing agency costs. The heterogeneity scenario test shows that compared with non-state-owned enterprises, non-heavily polluting enterprises, and enterprises in regions with a lower intensity of environmental regulation, EPLI plays a stronger role in the promotion of green innovation of state-owned enterprises, heavily polluting enterprises and enterprises in regions with a higher intensity of environmental regulation. In addition, it is found that the promotion effect of EPLI on green innovation is mainly reflected in the significant improvement of high-quality green innovation and the optimization of the structure of the green patent output. This paper affirms the positive role of EPLI on the green operations of enterprises and provides empirical evidence that green insurance serves the development of the green innovation of enterprises.

New evidence of moral hazard: Environmental liability insurance and firms' environmental performance

AbstractThis paper provides novel evidence of the moral hazard problem in environmental insurance by investigating the effect of environmental liability insurance (ELI) on firms' environmental performance. Using the staggered adoption of ELI policies in China as a quasi‐natural experiment, we employ a difference‐in‐differences setup based on a comprehensive firm‐level data set. We find that the adoption of ELI policies significantly reduces firms' efforts in treating water pollution. The negative estimate indicates a moral hazard problem and is the opposite of the positive estimates found mainly in studies that focus on US firms. We further find that the negative effect is lessened for firms in strictly supervised regions and for firms with strong environmental awareness. This paper is one of the first to evaluate environmental insurance in developing economies and provides novel evidence on moral hazard in environmental liability insurance markets.

Determination method of environmental damage liability insurance underwriting coverage of offshore factory wastewater based on OTUS

Determination method of environmental damage liability insurance underwriting coverage of offshore factory wastewater based on OTUS

Promoting Enterprise Green Development with Market Mechanism

Against the backdrop of China’s high-quality economic development, green development is the inevitable choice of Chinese enterprise. Promoting enterprise green development needs not only government but also market mechanism. On the economic development and social progress, promoting enterprise green development with market mechanism is the necessary way of socialist market economy with Chinese characteristics and making up for the lack of government administrative mechanism. Considering the macro-background of environmental governance system modernization and dealing with the relation between economy and environment, we can explore the practice path from environmental pollution cost internalization, construction of carbon market, green credit, green government procurement, consumer demand driving, environmental access threshold, sensitivity control of green capital markets, factors influencing corporate reputation and environmental liability insurance mechanism.

Sustainable Development on Indonesian Environmental Risk Assessment

Environmental risks in Bank financing activities arguably draw considerable attention in current era, efforts to mitigate these risks are one way for the Bank to achieve sustainable development. Nevertheless, there are no universal consensus of what environmental risks. This paper will summarize and define environmental risk from several previous studies using literature reviews, in order to obtain a comprehensive summary of the definition of environmental risk for bank financing especially in Indonesia. Furthermore, this study will also describe the mitigation that has been carried out by Banks in Indonesia in dealing with these risks, as well as other efforts that can be taken to better mitigate these risks. The study results found that environmental risk consists of: Transition Risk, Physical Risk, Liability Risk, Legality Risk and Reputation Risk. This study also finds that banks in Indonesia still do not have adequate mitigation against these risks. Transition, legality, and reputation risks can be optimally mitigated by enhancing the Bank’s management capabilities, especially in improving the company’s human resources in environmental protection efforts. Physical and liability risks on the other hand can be further mitigated by increasing the minimum required insurance coverage for the Bank’s debtors including environmental liability insurance and weather insurance.

Relevance of Environmental Liability Insurance in Achieving Sustainable Development With Special Reference to Baghjan Gas Leak Case

Baghjan Gas Leak Case in Assam has again showed the devastating impact of anthropogenic activities for economic development on the natural ecosystem. The case is about a leakage of an oil well under the ownership of Oil India Limited (OIL) which has subsequently led to severe damage to the ecosystem of the nearby areas along with causing the death of many livestock and individuals. This case is not the only instance where human greed for material development has led to the loss of the ecosystem rather there were many such instances in the past like- Bhopal Gas Tragedy, Oleum Gas Leak Case, etc. after which the Central Government in India was forced to pass the Public Liability Insurance Act of 1991 for implementing a new kind of insurance called the Environmental Liability Insurance for ensuring the security of both the present and the future generations from harmful activities possessing the potential of grave ecological damage on the lines of Sustainable Development. This paper will therefore focus on the relevance of Environmental Liability Insurance (ELI) in India to mitigate the consequences of harmful anthropogenic activities for eco-restoration.

Environmental Liability – Tools to Mitigate Financial Consequences of Environmental Liability through Insurance

This article focuses on environmental liability insurance of entities using environment against damage caused as a result of their activity. An insurance contract may be the most optimal form of securing claims related to an imminent threat of environmental damage. As a rule, entrepreneurs have freedom in choosing the scope of insurance and in deciding whether to conclude an insurance contract or not. However, for certain types of activity, operators are required by the legislator to have financial protection covering possible environmental damage. Moreover, the article discusses the basic principles of environmental liability and the possibility of insuring this liability, including the cases of statutory obligation to be financially protected. Finally, it evaluates the effects of introducing compulsory environmental insurance.

COMPARATIVE FRAMEWORK FOR THE ENVIRONMENTAL LIABILITY INSURANCE

Growth of population and economic activity contribute to the increasing number of ecological incidents, which derive from different sources causing multiple types of pollution. Legal framework for selling this type of insurance was created by the introduction of the mandatory pollution liability insurance and the adoption of the insurance terms and conditions. In this paper, the author deals with several legal aspects of environmental liability insurance and those types of losses. Particular focus was on the notion of the ecological loss and object of coverage, insured event and period of insurance, sum insured and insurer duty. Authors conclude that the separation of the insurance (and terms and conditions) against environmental liability into a stand-alone product could be the next step in developing insurance conditions of the domestic insurance companies.

Adverse selection, limited compensation, and the design of environmental liability insurance contract in the case of enterprise bankruptcy

In the case of incomplete environmental liability insurance, enterprises are likely to go bankrupt. Rational enterprises generally do not want to insure the environmental loss liability in case of bankruptcy even if they are compensated by insurance companies. This means that the premium calculated now is high, which may be the main reason for the current enterprises to cherish insurance. Based on this, a basic model of environmental liability insurance contract considering bankruptcy under ex ante asymmetric information is established. The model is improved by using the information screening combination tool, which further improves the efficiency of information screening.

On Modern Threats to Environmental Sustainability in the Arctic: The Cybersecurity Factor and the Provisions of Insurance Against Environmental and Cyber Risks in Oil and Gas Installations

Due to unprecedented fires and rise in temperature climate change is occurring rapidly, melting the Arctic ice and uncovering new areas for expropriation of natural resources. Such expropriation needs to occur in a sustainable way, respecting the environment and the indigenous people. To achieve this, all inherent risks arising from any environmental threat (oil spill/any type of environmental accident, cyber risks of any nature) to oil and gas installations need be identified and environmental liability and cyber-risks insurance coverage need be in place. This article discusses the way for such insurance coverage to be placed and worded. It argues that the traditional (marine and other) property insurance policies coverage and wording is inefficient, as it ends up being fragmented due to the numerous policy exclusions and limitations; it also puts forward an argument for the need to have specific wording and cover for specialized risks, in relation to the operation of oil and gas installations in the Arctic and cyber-risk threats, taking into account potential environmental impacts and hazards. This article also argues that for the time being, as businesses and governments including those of the EU and the Member States become increasingly reliant on technology, it is imperative that additional cyber-related risks are identified and minimized or transferred externally. Finally, it offers some suggestions about cybersecurity policies covering specialized risks. Sustainability, Arctic, Cybersecurity, Environmental pollution, Environmental pollution liability, Offshore oil and gas

독일 환경책임법상 환경책임보험특별약관에 대한 법적 연구

자연 생태계는 국민의 건강을 지켜주고 삶을 지탱하는 국가의 보편적 복지의 필수사항에 해당한다. 자연 생태계 질서의 파괴나 자연환경의 오염은 국민의 건강과 생명을 심각하게 위협할 가능성이 있다. 일반적인 사고와 달리, 환경오염으로 인한 사고는 그 피해 범위가 매우 넓고 그 피해액 자체를 산정하는 것이 어려울 뿐만 아니라 피해 액수도 대단히 높다는 특징을 가지고 있다. 환경오염으로 인한 피해의 심각성을 예방하기 위하여 우리나라는 “환경오염피해 배상책임 및 구제에 관한 법률(이하 ‘환경오염피해구제법’이라 한다)”을 제정하고, 환경책임보험을 운용하고 있다. 우리보다 먼저 환경책임보험을 운영하고 있는 독일은 환경책임법 제정 전 일반배상책임보험, 수질오염책임보험 및 舊)환경오염배상책임보험으로 흩어져 운영하였다. 환경책임법을 제정한 후 현재 독일에서는 新) 환경책임보험모델이 성립됨으로써 기존의 보험을 흡수하여 운영되고 있다. 환경책임보험특별약관(이하 ‘특별약관’이라 한다)을 연구함에 있어, 특별약관에서 중요한 의미를 부여하는 다음의 사항을 주목해 볼 필요가 있다. 첫째, 보험자의 담보범위에 대한 사항이다. 특별약관은 점진적 오염을 담보하고 육해공 전 지역에서 발생하는 오염손해를 담보한다. 둘째, 보험사고에 대한 논쟁이다. 독일 책임보험일반약관은 손해가 발생한 시점을 보험사고로 보는 ‘손해사고시설’로 규정하고 있다. 하지만 특별약관은 환경오염으로 인한 보험사고에 대하여 ‘증명할 수 있는 최초 확정’라는 개념을 도입하고 있다. 셋째, 보험자가 담보하지 않는 사항들, 총 16개의 내용들을 살펴본다. 독일 특별약관 담보배제사유를 검토 함으로써, 우리나라 환경책임보험약관에서 인정되는 담보배제사유와 어떠한 차이가 있는가를 알 수 있다. 넷째, 특별약관상 인정되고 있는 보험자의 추가적인 책임기간의 의미와 기능을 이해해 볼 필요가 있다.

A Study on the Performance of the Duty to Mitigate the Loss in Environmental Liability Insurance (ELI)

A Study on the Performance of the Duty to Mitigate the Loss in Environmental Liability Insurance (ELI)

Pollution insurance—methods, coverage and beneficiaries under german policies

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.

Legal issues of environmental liability insurance under the Environmental Pollution Damage Relief Act

Legal issues of environmental liability insurance under the Environmental Pollution Damage Relief Act

Approaches to Reduce Conflict when Insuring the Environmental Cleanup of Closed Military Bases Intended for Redevelopment

ABSTRACTBase Realignment and Closure (“BRAC”) of military bases has occurred in waves over the last few decades. Many of these properties were operational through World War I, World War II, the Korean War, the Vietnam conflict, and into the modern Cold War. As part of the United States military's transfer of these properties to the local municipalities, which includes significant funds to cleanup remaining chemicals of concern, contract terms of the transfer typically require insurance policies that have the intention of mitigating the risk of additional future cleanup costs. As a result, numerous BRAC sites have established contracts with environmental consultants who have provided guaranteed fixed price contracts for cleanup of the site. To mitigate additional future cleanup costs, the environmental contractor is required to purchase a stop loss or cost cap insurance policy for their guaranteed fixed price contract to share the risk that there will be cost overruns in the cleanup of the known pollution. The redeveloper is required to purchase Premises Pollution or Environmental Liability insurance to share the risk that any newly discovered contamination will not result in additional cleanup costs for the redeveloper. This paper will discuss some of the recent lessons learned regarding (1) the terms of the initial cleanup transfer agreement, (2) efforts for project scoping/set-up, and (3) subsequent implementation dynamics of the relationships between the US Military, local municipality, redeveloper, and environmental contractor.

China readies new insurance scheme

When a chemical producer in China accidentally or intentionally causes serious damage to the environment—be it through a spill, an explosion, or another way—the company is usually ordered to cease operations. Its managers can be fined or even jailed. But most of the time, no compensation is paid to those affected. Local communities have to bear the cost of contaminated wells from which residents can’t drink, toxic soil that farmers can’t till, or polluted lakes that fishermen can’t fish. This could soon change. The Chinese government is on track to approve regulations requiring manufacturers in high-risk industries to buy environmental liability insurance. Draft regulations, supported by the Chinese Ministry of Environmental Protection and the China Insurance Regulatory Commission, were unveiled last month to allow industry and the public to comment. The next step will be approval by the State Council, the top organ in the Chinese government. Some in the

Los seguros y la protección del medio ambiente

El ámbito del seguro ha propuesto alternativas para abordar el daño ambiental, pero debemos cuestionarnos si son suficientes y adecuadas para enfrentar los retos y las complejidades de esa materia. En este sentido, se han analizado los seguros de daños ambientales y los seguros de responsabilidad civil por daños ambientales para evidenciar si estos son las figuras jurídicas idóneas o si por el contrario resultan insuficientes. Asimismo, se señalan algunos otros medios alternativos de dispersión de riesgo menos conocidos, pero cuyo radio de acción es más amplio que el del seguro y parecen una mejor herramienta para paliar las consecuencias del daño ambiental.