The European Union's Environmental Liability Directive which came into force in April 2004 will create increased liabilities for organisations of all sizes. Member states have until 30th April 2007 to incorporate the Directive's provisions into national law. It will also require business to meet increased levels of disclosure around their environmental exposures. Moreover, despite the drive for European harmonisation, EU regulations may still vary from country to country so organisations operating across more than one country must ensure they are aware of any differences in legal requirements and liabilities.
ACE believes that there is a significant lack of awareness and understanding of the implications of the new Environmental Liability Directive and that, as a result, many companies are inadequately covered. The situation is exacerbated by the fact that the majority of environmental liabilities are attached to small and medium sized businesses, which are those least able to absorb the often catastrophic impact of an environmental problem.
Speaking at today's Federation of European Risk Managers (FERMA) Congress in Lisbon, Portugal, Karl Russek, senior vice president of AER said: "The EU's Environmental Liability Directive is a wake-up call for European companies. We plan to work in partnership to help them understand their liabilities and to limit their exposures."
Pollution liability is a key aspect of environmental risk management with many European organisations currently under-insured, according to ACE. Exposures either due to on-going operations, or historic activities on property in previous years can have a significant impact. There is virtually no way to be certain of what took place on premises years ago, so any organisation which owns or rents land is at risk. The increased pressure to act in an ethical and responsible manner and according to corporate governance guidelines is also an important consideration for shareholders and other stakeholders.
AER is building on the expertise it has gained through working successfully in the US, a country with established environmental liability legislation. ACE's US market experience, combined with its extensive European presence and underwriting experience in the region, makes it ideally placed to help these organisations get to grips with their environmental exposures.
The business is headed up by Karl Russek, who was senior vice president of AER in the US, who will take on a similar role in Europe operating from ACE European Group's office in London. Speaking at the launch of AER in Europe at the FERMA Congress in Lisbon, Portugal, Russek said: "We are looking to build a balanced portfolio of business focused on long-term growth and profitability. We will achieve this through a defined underwriting process, to ensure that premiums are competitive, and by offering a full range of environmental liability insurance solutions designed with the needs of European organisations specifically in mind."
Notes to Editors:
ACE Environmental Risk offers a range of environmental liability solutions from traditional risk transfer to bespoke programmes. Specific products include:
-- Premises Pollution Liability (PPL): claims made policy offering a range of cover for gradual, sudden and accidental pollution resulting from the ownership, control and/or operation of premises.
-- Contractors Pollution Liability (CPL): Offering pollution (gradual and sudden and accidental) liability protection to insured contractors and subcontractors.
-- Contractors Pollution/E&O - a package policy designed for environmental contractors and consultants who derive the majority of their revenue from services.
-- Remediation Cost Cap/Containment (RCC) - A stop-loss policy that provides the insured with protection against cost overruns resulting from a pollution clean-up project. The policy is intended to protect against the uncertainty involved in undertaking a redevelopment project of a contaminated site and minimise the associated risks.
The ACE European Group comprises the operations of ACE Europe, ACE Global Markets and ACE Tempest Re Group. With an established presence in 16 countries across Europe and Freedom of Services permissions to operate in 27 European countries, ACE Europe provides a range of tailored Property and Casualty, Accident and Health and Personal Lines solutions for a diverse range of clients. ACE Global Markets (AGM) is ACE's specialty international business, underwriting through ACE's Lloyd's Syndicate 2488 and UK registered company ACE European Group Limited. Specialty lines include excess and surplus lines business, Marine, Aviation, Energy and Political Risk as well as Property, Financial Lines and Accident and Health. Additional information on ACE European Group can be found at www.aceeuropeangroup.com.
The ACE Group of Companies is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited (NYSE: ACE), a component of the Standard & Poor's 500 stock index, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at: www.acelimited.com