Environmental Liability Policies


Corporate mergers and asset acquisitions often can involve difficult issues of allocating liabilities for known and unknown environmental problems. There are several methods for dealing with environmental liabilities in corporate transactions, one of which is the purchase of insurance policies specifically designed to insure such liabilities. Our attorneys have significant experience in negotiating the terms and conditions of environmental liability policies to make sure that our clients get the most comprehensive protection that fits their particular environmental risk profile. In the event that disputes arise concerning these policies, our hands-on involvement with the policies, combined with our industry-recognized skills in insurance recovery litigation, makes us uniquely suited to maximize our clients’ recoveries of insurance proceeds.

To Buy or Not to Buy, That Is the Question

Environmental liability policies are unusual and highly specialized insurance products. Such a policy may or may not be the right vehicle to protect against environmental liabilities relating to a particular corporate transaction. Our attorneys work with clients in corporate transactions to determine the best way to account for actual and potential environmental liabilities, including evaluating whether environmental liability policies should be part of the transactions. This evaluation can include a comprehensive search for, and review of, historic general liability policies that may also insure environmental liabilities, as well as a thorough understanding of the environmental exposures. If it is determined that an environmental liability policy is a good option, then we work with brokers and insurance companies to develop the proper coverage. Some of the factors that affect the utility of environmental liability policies include:

  • Whether the corporate transaction is a merger or an asset acquisition
  • Whether indemnity is available from the seller of corporate assets
  • Whether environmental liabilities are pre-existing or may arise in the future
  • Whether historic general liability insurance is available to insure environmental liabilities
  • Whether environmental liabilities may result in claims from third parties

Claim Resolution and Litigation

Our attorneys are recognized around the world for their skill and experience in litigating insurance recovery disputes on behalf of policyholders. Our background in negotiating environmental liability policies gives us a unique understanding of how such policies function, and allows us to guide a claim through the entire process, from initial notification of the insurer to final payment, with the intent of minimizing the potential for disputes. In the event a dispute does arise, we are well-placed to resolve it in a way that maximizes our client’s recovery.