Q&A: Nicolas Givelet, Ace’s new environmental risk taskforce lead

Q: What are your aims and objectives in your new role?

A: Environmental claims are complex and environmental regulation is different across the globe. For example, a level of pollutant may be acceptable in one country but unacceptable in another. Additionally, pollution incidents may require advanced remediation techniques, so one of my key objectives will therefore be to assist the pan-European underwriting and claims teams, as well as liaising with Ace’s clients and suppliers to understand what the key technical issues are.

Q: Tell us a bit more about the projects that you will be working on?

Given the increased awareness among governments and companies of the consequences of environmental risk, and the growing number of clients purchasing environmental risk policies, we can expect the size of the insurance market and the volume of claims to rise over time.

It is therefore of great importance to us that we are ready to assist our insureds on the various aspects of responding to a pollution incident, including the rapid implementation of emergency operations, communication with media and authorities, and remediation operation. So one of the key projects I will support is an initiative to further enhance the environmental claims service we provide, including the development of crisis management services and emergency communication and emergency response co-ordination for our European clients in the event of an environmental incident. We’ll be announcing more details of our plans over the coming months.

Q: What would you consider are the main environmental risks facing businesses at moment?

A: While companies may focus on potential liability claims, businesses are more likely to suffer from a pollution-related incident that damages their property. Clean-ups of such incidences are expensive, resulting in significant fines that could cause lasting harm to their reputation. But while companies may expect these exposures to be covered under their general liability insurance policies, they are typically excluded.

To protect a company’s reputation as well as to protect against environmental risks, Ace offers pollution policies that provide coverage for first-party environmental remediation costs; potential third-party liabilities arising from on-site incidences; and environmental damages related to the Environmental Liability Directive (ELD) or to similar regulation outside the European Union.

Q: What challenges are presented by the ELD?

The main challenge of the ELD is in understanding the variety of rules. The directive has established a common baseline across all 27 member nations, but significant differences remain in each country’s laws and in the way they apply the ELD. Not only are there varying rules in each nation, but also regionally within those nations (for instance, within each of the German states or within Scotland, Wales and Northern Ireland in the UK).

While the ELD sets a common standard, it does not preclude member states from having stricter requirements and it gives them significant leeway in implementing the rules, including mandatory financial security. For instance, to date, only a minority of the EU members have mandatory financial security in force, including Bulgaria, Czech Republic, Portugal and Slovakia.