European risk managers ‘lulled into false sense of security over environmental risk’

Environmental risk ranked lower as a concern in Europe than any other region in Aon's Global Risk Management Survey 2009 – despite the introduction of the EU Environmental Liability Directive (ELD). At the Federation of European Risk Management Associations (FERMA) conference in Prague on 4th October, the global insurance broker and risk adviser is warning European firms to wake up to the reality that this legislation could see companies held liable for unprecedented costs for clean up and restoration of environmental damage.

Simon Johnson, Aon’s environmental director for UK and EMEA, said: “There is a common misconception that the ELD is just about ongoing operational pollution issues. The reality is the ELD significantly increases liability in the EU for operators that cause environmental damage, regardless of how that damage is caused. The fact that environmental risk ranked 32nd as a concern in the survey is worrying because risk managers are seemingly lulled into a false sense of security, believing they have no exposure or their pollution strategies are under control.

“This ignores exposure to the impact an unpredictable one-off event on the environment could have on the balance sheet. It’s about preparing for the low frequency, high severity event by having insurance in place that covers all the risks, damages and losses that could occur.”

www.aon.co.uk

•Date: 1st Oct 2009• Region: Europe •Type: Article •Topic: Operational risk
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