The Federation of European Risk Management Associations (FERMA) has called upon insurers to be less "risk averse" and develop products that will allow businesses to protect themselves against new exposures to liability for environmental impairment that they may face from the end of April.
This appeal follows the publication by the European Insurance Committee (CEA) on 17 January 2007 of its white paper on the insurability of environmental liability. Members of the European Union must implement the new European Environmental Liability Directive into their national law by 30 April 2007. The European Commission has, however, given the insurance industry until 2010 to develop financial mechanisms for responding to the liabilities.
Pierre Sonigo, who represents FERMA on the CEA environmental expert working group, says that this gap in timing will leave businesses facing considerable uncertainty with potentially large exposures that they cannot insure. "At the moment, insurers are risk averse when it comes to environmental liability. They should be more proactive in providing products now that the directive is being transposed into national law. Our companies need to take risk to survive; insurers should do so, too."