Magazine article Risk Management

Insurers Create Their Own Lexicon

Magazine article Risk Management

Insurers Create Their Own Lexicon

Article excerpt

the American aficionados of Pliability policy wordings, here is an amusing and perhaps instructive look at the muddle insurers on the other side of the Atlantic are getting themselves into over liability wordings. First, insurers in the United Kingdom are coming to terms, or depending on your viewpoint, floundering in the mire, over the distinction between "pollution" and environmental impairment." Second, a new policy is being put together to underwrite "gradual pollution." Or is it "gradual environmental impairment"? As for the distinction between pollution and environmental impairment, according to a spokesman from Swiss Re, the latter is "the intermediary between the emission of some harmful agent into or upon the soil, atmosphere or a body of water and the consequent injury or damage to persons or tangible property or any legal rights." "Environmental impairment only takes place if there is a change in the natural state or condition of the soil, the atmosphere or the water," he says. "What is decisive is the difference between the state or condition prior to and after the emission, not the difference compared to the 'pure' original composition....Pollution, however, takes place without changing the state of the soil, atmosphere or water, and it is this fundamental difference that creates much of the difficulty. We now embrace noise and many other things with the term pollution, so that some of the suitable subjects for cover under a general third-party policy are swept up with the genuine concerns of reinsurers over the environmental issues and the sudden versus gradual scenario that attention seems ultimately to focus upon." What I say, apropos of the Swiss Re view, is that as far as the English language is concerned there is no difference in meaning. Environmental impairment is American English for pollution; its use follows the American language principle that wherever two or three vague abstract words with a Latin origin can be substituted for a single forceful word which conjures up an image of the thing it describes, it should be done. I should add, in mitigation of my criticism of Americans' abuse of the language, that we Europeans have caught up now and are quite capable of leading the way in the future. …

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