NZ needs to clean up its environmental act, insurer says
March 16, 2017
The increase in pollution and contamination incidents in New Zealand means businesses are becoming increasingly
vulnerable to the potentially high financial cost of such events, a leading insurance expert says.
Delta Insurance general manager Craig Kirk says various combinations of traditional liability policies, albeit each
coming with their own exclusions, only serve to paper over environmental liability cracks.
Taking a proactive risk management approach is paramount for businesses, he says.
“Companies must be aware of the environmental risks associated with their business. They should have a robust response
plan in case they fall victim to a pollution incident. They need an assessment of the likely financial impact on their
business of any environmental incident.
“Unfortunately, even despite the most robust risk management system it is impossible to entirely remove inherent risks
from a business operation.
“The consequences of a pollution event can be catastrophic for the environment but also financially for the polluter. It
is here that the understanding and incorporation of comprehensive environmental liability and pollution insurance can
protect businesses in the wake of a pollution incident.
“We believe that protection of our environment is a social obligation for all Kiwis and organisations, a sentiment
increasingly echoed by public and government opinion.
“Demand for more developed and customised environmental and pollution liability solutions will continue to increase
substantially over the next few years.”
As demonstrated by the recent water contamination crisis in Havelock North, widespread pollution can have an enormous
impact on a community, from individual health to financial loss due to business closure, decreased tourism, decreased
manufacturing output and other knock-on effects.
Policymakers are actively legislating to address pollution issues as evidenced by the enactment of the Environmental
Reporting Act 2015. Litigation is increasing whereby there has been an upward trend in legal action in the Environmental
Court, with the number of filed appeals increasing by 24 percent over the past year, Kirk says.
“Stricter enforcement of the Resource Management Act 1991 and penalties imposed on guilty parties have in some cases
amounted to hundreds of thousands of dollars. Clean-up costs for serious pollution events can run into millions of
“This changing landscape has increased demand for specialist environmental insurance policies that provide an
all-encompassing ‘environmental shield’ with coverage for all pollution events that may affect a business. Yet the
industry has been slow to meet this demand.
“Like many emerging risks it is important to be ahead of the curve rather than react when it’s too late. The environment
is central to our perception of New Zealand and we trade on our 100 percent pure image.
“We believe that through collectively cleaning up our act in New Zealand today we will help create a safer and more
sustainable world for our children to inherit tomorrow,” Kirk says.
Delta Insurance is the only Kiwi owned and operated specialist liability underwriting agency in New Zealand.