The Environmental Liability Directive (2004/35/EC) (ELD) is a significant landmark in the changing European legislative and regulatory environment. Remediation is key, with those found liable for pollution obligated not only to clean up the initial pollution, but also to repair damage to land, water and living creatures, effectively restoring the environment as if the pollution had never happened.

The costs involved are potentially enormous. Environmental Impairment Liability (EIL) insurance can be a cost-effective means of minimising the fall-out should an incident occur. Its consideration, therefore, is a vital part of good governance.

While most organisations have become better at preventing pollution through physical controls, there is still a tendency to overlook or underestimate less obvious forms of environmental damage. Some organisations can also discover too late that their existing insurance policies do not cover their exposure.

Critical questions you need to consider include:

• Does your organisation know where all of its environmental risks lie?
• Do you have adequate cover for the new EU Directive on Environmental Liability, which carries new responsibilities for remediation?
• Have you weighed the cost of your insurance cover with the potential financial liabilities that you face?