Environmental Impairment Liability Insurance

Updated: 09 June 2023

What Does Environmental Impairment Liability Insurance Mean?

Environmental impairment liability insurance (EIL) is insurance coverage for liabilities associated with environmental damage or pollution. Companies that may be at risk for losses associated with pollution often purchase these policies. It offers coverage for accidental pollution from normal operations, pollution that arises from products of the business, and other similar mishaps that result in environmental harm.

Insuranceopedia Explains Environmental Impairment Liability Insurance

Pollution can be incredibly costly to a business. For example, imagine a gold mine accidentally spills toxic substances into a river, which then becomes polluted and contaminates riverfront property for miles. This could result in millions of dollars’ worth of damages, EIL insurance protects against the liability that would result from such events. Some companies, such as organic farming companies, may be at a significantly reduced risk of pollution damages, These companies may not have need to purchase environmental impairment liability insurance, unless it is mandated by law.

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