Magazine article Risk Management

The Shape of Things to Come

Magazine article Risk Management

The Shape of Things to Come

Article excerpt

Sometimes it seems like the insurance market has become the casualty insurance market. Most of the problems, interesting developments, legislative and regulatory matters, etc., in insurance appear to revolve around or seem to be aimed at some aspect of casualty insurance.

For example, it is beginning to look as though there will be a European Community-wide waste management policy in the not-too-distant future. Already, the EC Commission has published a revised proposal for a directive on civil liability for damage caused by waste, with a view to it being implemented by 1992.

The revised directive's aims reflect the EC Treaty's view on environmental policy: The environment should be protected by preventative action; environmental damage should be rectified at the source; and, most important in the context of the latest revisions to the directive, the polluter should pay. This last principle is why the latest draft of the directive includes a requirement that liability under the directive must be covered by insurance or some equivalent financial security. So, the polluter should pay" policy in the future will read the "polluter's insurer should pay."

The EC Commission is not merely giving a new and nasty twist to the treaty's "polluter should pay" principle. The idea is to overcome distortions in competition resulting from differing national liability laws in the EC and raise waste-disposal techniques.

Producers of waste-other than nuclear and oil pollution-will be held strictly liable for any damage they cause by its disposal. Moreover, the proposal extends to waste importers who are in control of waste when danger occurs-if the original producers cannot be identified-and are the final waste disposers.

All contingencies seem to have been considered. Waste producers will not escape even by giving the noxious substances to specialist waste-disposal companies.

The category of exposures covered by the directive are death or injury; property damage; and environmental damage, which suggests that environmental-protection groups might have a basis for civil actions under the new directive.

Some flexibility is allowed to member countries in deciding various aspects including what remedies will be available, but national legislation must allow injunctions to prevent more damage, and to order cleanups and compensation for damage and plaintiffs' costs. …

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