Basic Environmental Liability Clause (UHV Model)

Purpose

AHB clause 7.10 (b) generally excludes liability claims for damage caused by environmental impact from general liability cover, with carve-backs including personal liability and certain product liability scenarios. The basic environmental liability clause, following the environmental liability insurance (UHV) model, withdraws this exclusion for a defined core area and provides a standalone basic policy for sudden, accidental environmental damage.

Effect and limits

The basic cover typically responds to sudden and accidental impacts on soil, water or air, but not to gradual environmental impacts occurring over an extended period, which require a separate agreement. Also excluded remain losses from installations used to manufacture, process or store water-hazardous substances (WHG installations) and from environmental installations subject to permitting requirements, for which a specialised environmental liability policy with its own coverage design is needed.

Negotiation and practice

For businesses with low to moderate environmental risk, the UHV basic cover can offer a cost-efficient foundation, while businesses operating permit-requiring installations or handling water-hazardous substances typically need a dedicated, risk-appropriate environmental liability policy with higher limits and remediation cost cover. The boundary between the basic cover and a specialised policy should be clearly documented as part of the risk analysis.