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LIVA M&A Insurance Services

Environmental Insurance

Environmental insurance is a tailored solution which covers existing pollution conditions (i.e. legacy liabilities), new pollution conditions (i.e. an operational insurance to cover potential new issues going forward), or both. It can provide cover for unknown and known issues.

Insured:

Seller, Buyer or Target.

Policy Period:

Existing, legacy pollution conditions – up to 10 years for existing pollution conditions.

New pollution conditions – typically, up to 3 years, with the option to continue subject to insurer’s review.

Cost:

0.5% – 2% of the insured limit of liability for a pure legacy, existing pollution conditions only policy, increasing to 0.75% – 4% of insured limit for a composite legacy and operational, new pollution conditions policy.

Cover:

Insurers provide cover for gradual or sudden pollution conditions (including asbestos) that may result in the insured incurring a liability during the policy period for (i) clean-up of the environment, (ii) natural resource damage, or (iii) third party bodily injury or property damage. Within the insured limit, policies also cover the insured’s associated defence costs, and can be extended on a case-by-case basis to cover punitive damages and civil fines.

Cover for known pollution conditions may be available on a case-by-case basis, subject to underwriting. Cover is normally linked to pollution that has occurred at a specific location(s), which is/are scheduled on to the policy.

Required Documents:

- Transaction Documents.

- Any Phase I or Phase II environmental due diligence report.

- Exact location to be insured.