The scale was enormous but environmental damage could equally destroy smaller businesses.

A year ago, it would have been inconceivable that BP, the largest British listed company could face financial meltdown in the next 12 months. Yet, for a period in the early summer, there were doubts whether the business could survive the disastrous oil leakage in the Gulf of Mexico. The costs of the disaster covering the rig itself clean-up costs and potential loss of profits and compensation claims, threatened to overwhelm the company. Strict liability for environmental damage meant that, initially, BP had to bear all the costs before it can begin to try to recover some from other parties. There are still threats of criminal prosecutions and huge fines. There was enormous damage to the reputation of the business that, even now, could have far-reaching consequences for the future of the business. The total economic loss for BP could still be $50bn and whilst it will now survive, the business will never be the same. BP may have limited insurance cover but the vast amount of the loss has had to be borne by the company. The scale of the event is mind-blowing but is a lesson for all businesses, especially those who handle or store substances that can cause pollution or occupy premises where a previous usage may still cause problems. A business that causes environmental damage is strictly liable in the UK without any defence. The maxim is the polluter pays. Whilst a loss on the scale of BP is hard to imagine, businesses can still face huge costs if they cause pollution. Insurance cover under normal policies may be limited. Any claims arising out of a gradual pollution is unlikely to be covered and, whilst Liability policies may cover sudden and unforeseen pollution, cover could be limited for clean-up and any potential financial claims. Policies may be in place to cover prosecution costs but not fines. There are specialist covers available for environmental impairment risks and these should be considered for any business where a potential hazard exists. BP may be an extreme example but a small company could be equally threatened as a result of a leaking tank, an unfortunate spillage or a long forgotten disposal of materials which were considered harmless then but now regarded as toxic. If you have any concerns, do not hesitate to contact us.

The lower value of the pound should make our exports more attractive. It is a central plank of economic policy that as the role of the public sector is reduced; the slack is taken up by private enterprise. This can only be achieved by substituting imported goods by those manufactured in the UK or by exporting more. The value of the pound should help but for many smaller companies exporting can be a hassle with lots of red tape. One of the issues that should be considered is the insurance implications of selling goods and services abroad. This can easily be resolved by contacting us. There are three areas which normally need consideration:

• Cover for the goods, and samples, equipment which may be used overseas or exhibitions attended. The requirements depend on your terms of trade but cover can easily be arranged on goods to dovetail in with these. It is normally best for you to organise the cover rather than let the customer or freight company do this, as you then have the comfort of knowing it is within your control.
• Directors and staff need protecting whilst abroad. An annual business travel policy can be arranged to cover medical expenses, luggage, cancellation, replacement of staff etc. There are specific policies designed for the business traveller. In special circumstances, kidnap and ransom cover may be advisable.
• You need to be sure your liability covers are adequate. If you are working abroad special covers will be needed and exports to certain areas such as North America require special consideration. Insurance costs can increase substantially as litigation is extremely costly and court awards much higher.

We are very experienced in arranging insurance for companies which export goods and services and can often help in making the entire process much easier and in the end less costly. Call Gary Holland or Tom Butler on 0113 250 0377 for a discussion to assess your needs and requirements. Back to news

More customers are demanding details of environmental policy from suppliers

Many businesses are finding they need to manage a wide variety of issues, many of which have an environmental context. Legislation such as Packaging Regulations, Environmental Permitting Regulations, the landfill tax, and VOC (Volatile Organic Compounds) should all be considered. In addition, there is an increasing need to demonstrate environmental awareness to customers who may be demanding your environmental policy, proof of audits, or information about how you manage the environmental aspects of your business, as well as to satisfy the regulators or your insurer. The best way of managing this process is by having and implementing an overall strategy for managing environmental matters. This is known as an Environmental Management System (EMS), bringing together all the relevant issues in a single strategic plan. There are currently a number of environmental management standards for which, external certification is available:

• ISO 14001:2004
• EMAS (the European Eco-Management and Audit Scheme)
• BS 8555:2003

It may be worth investigating these for adoption in your business. As a first step, organisations should carry out a review of their activities which affect (or could affect) the environment. These may be:

• Regulatory, involving for example, waste disposal, emissions to atmosphere or discharges to water through drains or effluent
• Resource issues such as raw materials sourcing; water or energy use
• Neighbourhood issues such as noise or transport

The review will highlight useful areas of environmental gain as well as those areas which require positive management to minimise risks. Suggested Steps

• Review how your business affects the environment
• Make sure you know what legislation is relevant to you
• Examine your use of resources
• Develop an environmental policy
• Develop procedures for key environmental tasks utilising best practice
• Set objectives for environmental improvement
• Carry out training for those people who carry out tasks which affect the environment
• Audit and review progress
• Make progress review reports available to stakeholders

Demonstrating your commitment to the environment is fast becoming a business necessity and is a feature of winning new contracts. Customers want to be assured that the environment is not overlooked and that environment is integrated into the management philosophy. EMS can help you reduce environmental risk by identifying weak spots and managing key issues. It will help you to identify areas for savings and may help you to avoid making expensive mistakes. It is also a requirement of insurers for some businesses where the risks are high for full cover to be granted. There are companies who can help in producing an EMS and if you want a contact name please ring Tom Butler on 0113 202 1227.