The consequences of tightening legislation

Whose facilities and operations are unwittingly exposed to unprecedented levels of environmental liability? Whose directors may bear both personal financial and criminal liability for the consequences of environmental damage caused by the corporate entity? The answer is, unfortunately, most Airport Operators but how would you know and would you know the difference?

With an increasing number of Airport Operators publicly aligning themselves with the sustainability agenda protection for this ethical approach is being undermined by the scant regard paid by too many insurance advisers to the inadequate or non-existent level of insurance coverage afforded for environmental liability within Airport Operator’s Liability (AOL) insurance programmes.

You might ask, how has this happened, how did it creep up under my radar and how can I address this unsatisfactory situation going forward?

It happened because environmental legislation has changed and for some this has complicated the hitherto straightforward steps taken to evaluate your insurance needs. More complex and pervasive legislation has increased the need to develop an almost intuitive understanding of its impact on airport activities and how your duties, responsibilities and liabilities have changed. Environmental risk is now unique in as far as liability is created through both tort and statutory systems but coverage for this important risk is normally subject to a standard exclusion under AOL policies. Failure to recognise in full the limitations of these policies with regard to the nuances of modern environmental risks can exacerbate an already perilous situation.

Lack of clarity around this subject partly exists because the responsibility for advising on how the different disciplines of environmental risk are affected can often fall between different professional advisers (insurance, legal, financial, environmental) and so unless your insurance adviser can show joined up thinking, focused on the multi-faceted risk impact on your airport, it is easy for the true consequences of tightening legislation to silently creep under the radar.

This is particularly relevant for those promoting the virtues of the sustainability agenda where stakeholder expectation will be heightened. The environmental risk element of the sustainability agenda, if misunderstood or uninsured, can impact the balance sheet and airport reputation. After all why should you routinely survey, protect and insure your airport facilities against the risk of fire, theft, flood but not understand and insure your environmental risks which can lead to comparatively more complex and costly claims to the business. Understanding your risk is your protection.

To even the most casual of observers it makes sense to understand the changes that are taking place, what is driving these, the intent and how they can affect your risk spectrum and what you should be doing to stay one step ahead. Start asking your insurance adviser how to embrace environmental risk and how it can work for you. Their advice and experience in this field will vary but environmental risk is an exposure and an opportunity, learn to understand the difference. There are experienced insurance advisers who can pin point exactly where your existing and emerging environmental risks converge, the limitations of AOL insurance and the need for specific environmental insurance products to protect against hitherto uninsured and/or misunderstood exposures.

Biography

Neil Cameron is the founder and Managing Director of Insight Environmental Limited. Insight is a niche insurance adviser firmly rooted in the global environmental insurance market. It’s core offering is a unique mix of experience and expertise designed to help companies develop a truly accurate and intuitive understanding of environmental risk, the effect this can have on their business and of course how this shapes their insurance needs. Neil has spent the past 15 years specialising in environmental risk in both the underwriting and broking markets and continues to ensure his business clients are advantaged by his knowledge built up over this time. Whilst Neil has experience of providing advice to a broad range of companies he continues to progress his enthusiasm for providing strategically important advise on the insurance needs of airport operators on a worldwide basis.