Insurance for Civil Liability Arising from Environmental Damage

Abstract

Given the inadequacy of general legal principles in covering all compensation arising from environmental civil liability, it is imperative to establish alternative financial mechanisms, such as financial guarantees. These mechanisms should be founded on advanced fundamentals and techniques capable of effecting a transformation in the traditional civil liability system. Since the liability insurance system possesses unique techniques that influence the function of civil liability rules—by transferring the enforcement function of this liability to the realm of implementation through obligating insurance companies to compensate for high-value environmental damage and resulting of a review of traditional and specialized insurance systems and their capacity to perform this function reveals their limited ability to cover all environmental damage of a hazardous nature. This limitation stems from the excessive value of certain types of environmental risks intended to be insured, in addition to the particularities of the insurance contract, which is based on highly precise legal and technical foundations. Consequently, it has become necessary to develop an advanced insurance system capable of addressing the issue of insuring against environmental damage resulting from civil liability. Accordingly, we urge the legislator to incorporate rules for compensating environmental damage resulting from environmental liability within the framework of the obligatory insurance system adopted and applied in the field of motor vehicle liability insurance. This should apply equally to economic activities impacting the environment, encompassing both hazardous and non-hazardous activities. Furthermore, we call upon the relevant authorities to provide material support to national insurance companies to encourage them to venture into this domain.