Why should every start-up company
consider environmental liability coverage?
The harmless products and processes of the past have emerged as dangerous
long-term pathogens of the present many times - lead-based paint, asbestos,
Start-ups begin with a new idea, product or service which cannot, by the nature
of business, be thoroughly time-tested. As an entrepreneur, you must decide,
with sparse data, to go forward.
Unfortunately, injured parties have the advantage of hindsight and long-term
The period of uncertainty after new launches creates a long-term liability for
environmental liability as well as products liability. Think about:
1. What are the byproducts?
2. What is our waste stream?
3. Can our components be recycled?
4. What will be the result of employee exposures?
5. Are there any known potential issues.
Review the history of products liability. Caveat emptor morphed into warning
labels which soon became punch lines. "Do not use your lawn mower as a
hedge trimmer" or "Do not dive into two feet of water" seem like
unnecessary warnings, but the legal cases were lost and money changed hands.
Environmental liability is likely to evolve along this same pathway.
The late seventies brought government interventions like EPA and an
environmental Cabinet Post. Since then, public consciousness has risen
dramatically and sensitivity towards environmental issues has grown.
Unfortunately for business owners, even the most green-minded, environmental
impacts are still not well defined and responsibility not settled.
Unable to reduce or modify the environmental risk, the best solution is
transferring the risk by insuring it.
No matter how benign you believe your company's product, process or service to
be, you cannot adequately predict the environmental issues twenty years in the
future. Certainly asbestos, a natural mineral, was considered safe by its
Look into environmental liability insurance for your start-up, or your mature
The holidays are almost upon us and alcohol will be flowing at company parties throughout the land. Beware! If an employee or guest gets inebriated at a social function sponsored by your business and then injures another person, you could be held liable.
Consider this scenario: After polishing off four eggnogs in an hour at the company’s Christmas party, one of your workers toddles off to his car. The employee almost makes it home when he runs a red light and T-bones a car. The car is damaged and injures the driver. The driver then sues your business for negligence in allowing the employee to drive home although he was clearly “under the influence” at the company party.
What’s more, under state and local “social host” laws, your business might face a fine or even imprisonment for continuing to serve alcohol to an adult who is legally drunk.
Under your comprehensive general liability policy is a clause for host liquor liability. The insurance company will pick up the tab for property damage and bodily injuries, up to “each occurrence” or “general aggregate” limits for the CGL. This coverage will also pay for court costs, legal fees, and other expenses – and these payments will not apply to the limits.
Be sure not to confuse host liquor liability insurance with Liquor Liability coverage, which protects businesses that manufacture, serve, or sell alcoholic beverages (such as liquor stores, bars, and taverns) against claims for injuries caused by intoxicated customers. If you’re in one of these businesses, you’ll need both types of policy.
To learn more, feel free to get in touch with our agency at any time.