I’ve just finished reading a fascinating article by Reed Smith on ‘Environmental Indemnities’, I’ve referenced it at the end of this post, but I wanted to share and expand on one section – getting the basics right.
I’m not surprised to hear that Reed Smith consider that there isn’t a standard environmental indemnity, i.e. a site specific indemnity will need to be written due to the diverse environmental questions which may need to be addressed about what is covered in the indemnity. The most important questions in my opinion are listed below-
- What are the implications of changing, and more stringent, regulations and guidance. Some sites became ‘contaminated’ overnight when regulations changed in the late 00’s. I’m sure this will happen again.
- How long will the indemnity last?
- Are there financial limits?
- What contamination is covered? It may only be contamination caused during the owners occupation, but not the contamination left over from the petrol filling station which was in place before they turned it in to a shop for example. It may be difficult to separate contaminant sources.
- Whose responsibility is contamination which has migrated off-site? Not only can you be enforced to clean this up if this can be proven, but it also hinders clean-up of your site as the contamination from the adjacent site can migrate back on to your site.
You can find the full article here.
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