Thursday, July 5, 2012

What is Environmental Liability and How Will it Affect Your Business?

Many companies, especially small businesses, do not have the capital to hire a team of lawyers and government experts to help them breakdown all of the governmental regulations that affect their business. In many cases there are thousands of documents that need to be thoroughly understood and complied with in order to protect your small business from fines due to violating a government regulation. One agency that has gotten a lot of publicity lately in the world of politics is the EPA. The environmental protection agency is tasked with the very important job of keeping the air, water and other natural resources in our country safe. This is a big job and many of the regulations the EPA have created are very important. These regulations are just part of a company's environmental liability. Those two words, environmental liability, cover a number of different matters that are very important for a business owner to be aware of. Many business owners choose to invest in insurance to help them cover any accidental problems that are covered in an environmental liability law suit. Here is a quick guide to help you understand the most important parts of environmental liability.

First, a company can be held accountable for any failure to comply with government regulations. Fines are often the penalty for either knowingly or unknowingly disregarding a regulation. If an accident occurs as a result of failure to comply with regulations the fines increase and harsher penalties are sometimes handed out. Some companies assess environmental liabilities to find out if it would be more cost effective to upgrade facilities beyond current regulations in preparation for future requirements.

Beyond governmental regulations, environmental liability can also relate to a business's financial responsibility for clean-up, workers compensation, and other financial burdens associated with an environmental accident even when no regulations were being violated. Sometimes these accidents are the result of an action that is outside the control of the business owner, such as operator error. In these cases, the company still can be affected by environmental liability.

Environmental liability also covers a number of potential accidents. Over the last few decades, concerns about natural resources have been growing and there has been a worldwide push by many governments from across the globe, to more closely monitor how industry affects natural resources. This type of increased regulation has made it more important than ever for companies to assess their environmental liability, limit their exposure to risk, and have a plan for dealing with possible accidents that could bring scrutiny upon their business and result in fines or other monetary losses.

An even more abstract form of environmental liability comes in the form of public opinion. Investing in safer more environmentally friendly work practices will help protect your business from consumer scrutiny. The public is becoming more aware and ever more concerned about the effects the products they use has on their direct environment and the earth at large. Keeping up with your companies eco image will help you maintain a lower risk environment and help your prevent accidents that could negatively impact consumers views of your business.

Written by Lawrence Reaves for Beacon Hill Associates - - a wholesale insurance broker and program administrator focusing on specialty insurance related to the environment and pollution.

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