Environmental risks in transport sector are underrated says AXA chief

Insurance buyers have limited options when it comes to environmental risk stemming from transportation says AXA Corporate Solutions Casualty chief underwriting officer Etienne Champion.

Speaking to StrategicRISK, Champion said: “There is a real risk of environmental pollution in the transportation and logistics sector. But today many professionals in the transportation and logistics sector are not sufficiently aware of this risk. It is often underestimated and the insurance cover is often not very well adapted.”

He added: “Starting from the site, you have transportation of your goods, then you may have several steps for intermediary storage and then you reach your final destination. During these steps, you risk pollution: pollution of third party, damage to biodiversity and pollution of your own site.

“The risk is spread all over the transportation chain – you have the starting and ending points, the sites where the logistics transportation company takes its goods from and to. And then you have the environment around roads, railways or inland waterways that could suffer pollution damages during transportation.” 

In light of the lack of quality cover for such environmental risks associated with transport, AXA Corporate Solutions launched its trans-sphere cover which includes environmental impairment liability cover, environmental liability coverage in accordance to the Directive 2004/35/CE and first-party coverage with land and water clean-up costs, insured’s operating site clean-up costs and business interruption.

The cover was launched in the French market in April this year and Champion suggested three possible destinations for a European roll-out including the UK, Spain and Germany.