2011 – Hidden Risk and the Environment
Tom Forster
Political solutions to controversial issues often result in onerous legislation being introduced from Brussels to the UK. As with any new law the devil is in the detail and what can appear at face value to be well intentioned legal change can often open up a whole raft of risk to the farming community – the law of unintended consequences.
The Environmental Liability Directive (ELD) 2009 is a good case in point. The legislation is designed to protect the environment from the risks posed by modern business activities. However, it goes too far. It creates a liability that hitherto has not been catered for by insurance policies. A whole new area of cover has had to be created to provide adequate protection.
Surprisingly many in the insurance industry have been slow to react, with some providers failing to understand the legislation and how it affects farming. As custodians of the countryside, environmental legislation affects farming more than any other industry. Even after adjustments, the majority of policies are inadequate as they fail to deal with the implications of the legislation and when farming could be in breach. Having “pollution cover” is not adequate. The legislation reaches further than pollution alone.
Is 2011 to be the year when farming causes a localised environmental catastrophe? Only then will the full scope of the legislation become clear. The clean up cost will be the headline and we fully expect to see this cost exceed six figures. Inadequate insurance protection is rife and the lack of understanding could cost someone their home or farm.
The farming industry must demand full Environmental Impairment Insurance that meets all aspects of the ELD. Only then will we see consistent and adequate protection for the farming sector.
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