Benefits of Environmental Impairment Liability insurance

Environmental Impairment Liability (EIL) insurance will cover you for costs relating to an incident of pollution on your farm.

The importance of EIL

As a custodian of the countryside you know that farming plays a key role in protecting the environment. However, there is a risk that some of your businesses activities could cause damage to the environment.

If pollutants such as fuel or pesticides aren’t handled properly, or silage and milk isn’t stored correctly, the results can have a serious impact on the countryside.

Legislation such as the Wildlife & Countryside Act 1981, the Water Resources Act 1991, Nitrate Pollution Prevention Regulations 2009 and The Environment Damage (Protection and Remediation) Regulations 2009 are all acts that you should be aware of in relation to your responsibility as a farmer.

The 2009 regulations were designed to ensure that the ‘polluter pays’ and the trend in legislation is moving towards the burden of proof sitting with the polluter.

Fines from the Environmental Agency can be severe which could leave your business financially exposed.

EIL insurance can cover you for:

  • Environment Agency clean-up costs
  • Any damages that you are ordered to pay from impacted businesses or individuals
  • The cost of defending your claim
  • Claims arising from environmental impairment

Rural’s EIL cover also provides a ‘retroactive date’ which means you are continuously covered from the date you first purchased the cover, even if this was from another insurer. This gives you more comprehensive cover in the event of a gradual incident.

Pollutants include:

  • Fertilisers
  • Livestock slurries and manure
  • Animal feedstuffs
  • Silage
  • Effluent
  • Agricultural fuel
  • Oil
  • Dirty water
  • Chemicals
  • Pesticides

Things to think about:

  • Carefully plan all storage and handling arrangements for all potential pollutants
  • Keep a suitable distance from watercourses (including ditches) and drinking water supplies when handling or applying fertilisers or chemicals
  • Make sure run-off from your farmyard, ring feeder areas and hard standings don't discharge directly to a watercourse
  • Don't employ contractors or companies in waste spreading unless they are trained and are planning to follow guidance in line with legal requirements
  • Be aware that even if it is not directly you fault (for example, if a burglar accidentally damages a slurry tank which pollutes a nearby river), you are the polluter and so are liable for any damages

Environmental Impairment Liability cover of up to £1 million is available in our Farm Combined insurance policy. Speak to your local broker to find out more.

An example of the importance of Environmental Impairment Liability

In 2016 a farm in Essex was fined £73,000 for a major pollution incident which led to the death of thousands of fish and affected drinking water supplies. This incident occurred because an employee was driving a tractor over a badly constructed bridge which should have been better maintained (or another route chosen)*.

Our client was moving slurry out of a main underground tank into a filler tank. Unfortunately one of the valves was not closed correctly and around 50,000 litres escaped into a nearby beck, causing the death of 2,000 fish. We covered the costs of the remediation and monitoring operation from the Environment Agency of around £20,000.