Environmental Liability Insurance is addressing the emerging protection needs for enterprises

Along with the development of the economy as well as the manufacturing sector, environmental incidents seem to occur more and more. We may have heard of very large incidents in Vietnam such as the incident of Vedan discharging wastewater into the Thi Vai River or the incident of Formosa illegally discharging wastewater into the sea. Such incidents always cause terrible environmental harm and cost a lot to handle. Consequently, business community attention has been recently drawn towards the importance of environmental liability insurance – a policy that is believed to become more and more common.

What Is Environmental Liability Insurance (ELI)?

Environmental insurance helps protect businesses from:

  • Claims that a pollution incident caused bodily injury or property damage to someone else.
  • Clean-up costs related to a spill or other type of pollution incident.
  • First party clean-up cost for contaminated land.

It’s typically mistaken that this coverage is part of a large business general liability insurance policy. In fact “Pollution” is generally excluded on liability policies. So, if the unexpected happens, companies find out that their general liability coverage won’t help with environmental claims or costs. Environmental claims can be complex due to many factors. Details of the actual breach, where it happened and who it impacted are layers of issues that make these kinds of claims difficult to navigate. The complexity is also a reason why they can be so costly.

Given the potentially catastrophic consequences of environmental damages, it’s essential for companies to evaluate, mitigate and protect against these  risks.

According to several regulations and decrees by Vietnamese Government, especially Law on environmental protection No. 72/2020/QH14 and Decree 08/2022/NĐ-CP detailing the implementation of the Law on Environmental Protection, ELI has become a compulsory insurance for some specified occupancies.

Contact our team to receive further in-depth and  comprehensive consultancy about this product as well as getting the right protection that match your own needs!


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