Many different kinds of businesses could unknowingly cause a negative environmental impact in the area where they have facilities. Any kind of company, ranging from a restaurant to recycling plants and industrial facilities, could accidentally engage in business practices that cause environmental damage. It is also possible for accidents or inclement weather to impact facility systems in a way that causes otherwise avoidable environmental damage.
Most companies have a legal responsibility to clean up and address environmental damages caused by their business operations. Given the potentially catastrophic costs associated with these kinds of cleanups, companies often choose to purchase environmental impairment liability insurance as a supplement to their general business liability policy, which most likely offers very little or no environmental protection.
Insurance companies don’t like to pay out on big claims
Regardless of what kind of policy you have or how much you pay in a premium, your insurance provider does not want you to make a claim against that policy. They will lose money if they have to approve a major claim. The profit incentive to deny valid claims is one reason why there are so many regulations that apply to the insurance industry specifically.
Unfortunately, some insurance providers will still intentionally and knowingly deny claims made against an active policy for an issue that there should be coverage for based on the terms of the insurance contract. This kind of denial is known as a bad-faith denial, and they are more common than people might imagine. An insurance provider could try to come up with excuses about why they denied your claim or delay paying out on a claim for so long that the business making the claim closes.
While you would ideally like to have your insurance provider cooperate with your company’s needs and respond appropriately to a claim, if they deny a claim that should clearly have coverage based on the terms of your policy, you may need to take action against the company for a bad-faith denial. While this process may take longer than in the standard insurance claim, it will still be beneficial, particularly if your company needs the insurance funds to initiate a cleanup.