Equates the price charged for using environmental resources with the cost to society. Charges may be direct through taxes on pollution-generating processes or indirect through the purchase price of licences entitling the holder to generate specific quantities of pollutants. Another approach is to make polluters strictly liable for the injury/damage that they cause, leaving them to carry the risk or undergo the scrutiny of an insurer. See ENVIRONMENTAL PROTECTION ACT 1995.

UK: Damage to land, water, property or the atmosphere by the disposal of waste materials or the release of toxic, corrosive, ionising, irritating, thermal or other noxious or offensive substances. The environment can also be impaired by noise or vibration. Pollution causes direct (bodily injury, damage to crops) and indirect (loss of profits due to business interruption and clean-up costs) costs. Statutory control comes through the Environmental Protection Acts 1990-95 invoking ‘the polluter pays principle’.
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US: The contamination of an environment by substances regarded as pollutants. Liability from pollution is normally excluded to some degree by the general, auto, and umbrella liability policies. In recent years, insurers have attempted to introduce strict exclusionary language into these policies, making it necessary for insureds to seek coverage under separate “environmental impairment liability” policies.

Public liability clause excluding liability for pollution and contamination unless caused by a sudden, identifiable and unexpected incident ‘happening in its entirety at a specific time and place during the period of insurance. All pollution/contamination arising out of one incident is deemed to take place at the time of the incident. The clause is more widely used than SEPTIC. The aim is to exclude gradual pollution from the cover. See ENVIRONMENTAL IMPAIRMENT LIABILITY; POLLUTION INSURANCE.

Covers loss or damage to the vessel following governmental action to prevent or mitigate a pollution hazard or damage to the environment or threat thereof. The government’s act must flow directly from damage to the vessel for which the underwriter is liable. (Clause 5 International Hull Clauses).

1. First party insurance indemnifying the insured in respect of expenses incurred in extracting pollutants from land or water on his own site(s) when their release results from an insured loss. Cover may be added to material damage insurance or marketed as pollutant clean up and removal insurance. 2. Pollution liability insurance covers the insured’s legal liability to third parties for bodily injury, property damage or clean up costs on third party sites. Cover may be the result of ‘sudden and accidental pollution’ as per the pollution clause or accidental nuisance, a term in the operative clause of the public liability policy, that usually applies to the accidental escape of pollutants, smells, etc. and includes liability for pure financial loss. Environmental impairment liability provides the widest cover as it applies to gradual pollution cover and may be combined with first party cover. 3. The debris removal clause brings the cost of removing or decontaminating contaminated items within the scope of material damage insurance. Similarly smoke damage following fire is a form of contamination and will be covered under material damage insurance. 4. See 1992 CLC.

Nonflammable liquids formerly used in heat exchangers, electrical condensers, hydraulic and lubricating fluids, and various inks and paints. Most uses of these highly toxic chemicals have been curtailed. Leakage of PCBs in food production led to widespread food poisoning in Japan and leading US authorities have classified PCBs as probable human carcinogens. The chemical is lethal to fish and harmful to wildlife.

Government-inspired mutual company authorised to transact reinsurance for property and business interruption and related classes. By agreements with the government Pool Re provides its members (major insurance companies and Lloyd’s) with reinsurance cover for losses from commercial property damage in Great Britain caused by acts of terrorism. Members offer ‘defined’ terrorism cover where they insure the property against fire and explosion and they reinsure their terrorism portfolio with Pool Re. Pool Re is a party to a retrocession with HM Treasury who will indemnify Pool Re against its reinsurance liabilities to members subject to exceptions and deductions for expenses. In 2003 the market for terrorism became fully competitive, rates previously set by Pool Re having been lifted with wider terrorism cover, i.e. all risks’, also becoming available. See TERRORISM; TERRORISM COVER.

Common form of general average expenditure arising when a ship enters a port of refuge following a casualty or general average damage to the ship. If the entry is due to accidental damage, only the expenses of entry into port and dis charging the cargo, if necessary for the purpose of repairs, are allowed in general average. If entry follows general average damage, the following are also allowed: warehouse rent during repairs; cargo reloading costs; outward port charges.

‘All risks’ cover for vessels laid up in the sheltered location for an extended period or for smaller vessels working only in and around the port.