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Ask the panel: questions of liability

Your insurance questions answered by the experts.

Can remediation consultants be liable for pollution, even when working on behalf of a client?

Yes, particularly where the consultant or contractor physically does something or omits to do something that leads to pollution being caused or exacerbates existing pollution.

Where the consultant can be said by its actions (or inaction) to have "caused or knowingly permitted" the presence of polluting matter in "controlled waters", the Environment Agency can require the consultant to remove the matter and restore controlled waters. It can also bring a criminal prosecution against the consultant. The definition of "caused or knowingly permitted" is extremely wide.

Where the consultant has caused or knowingly permitted the presence of substances in or under land, and those substances are putting people, property or controlled waters at risk, the consultant could be liable for remediation under the contaminated land regime set out in Part IIA of the Environmental Protection Act 1990.

A consultant is excluded from liability if all it has done is provide engineering, scientific or technical advice or services to another party for the purpose of assessing the condition of land, or establishing remediation steps. But if it carries out intrusive investigations it risks losing the benefit of exclusion if the investigation is a cause of the existence, nature or continuance of the risk.

Consultants should check insurance includes cover for pollution risks.

Aidan Thomson is a partner at law firm Barlow Lyde & Gilbert

I am a geotechnical engineer and about to submit a tender for site investigation on a large project. The tender document requires me to carry a certain level of professional indemnity insurance, but also refers to pollution and contamination cover. Is this included as standard in most policies? If not, what should I be looking for?

Most geotechnical engineers could be exposed to a pollution-related claim, particularly working with land or water. Cover for this is dealt with in different ways under a professional indemnity policy depending on who the insurer is, and its perception of the risk involved.

This first thing is to make sure that your policy does not exclude pollution cover altogether. A typical exclusion will read as follows: "Insurers will not indemnify the insured against any claim based upon, arising out of, or relating directly or indirectly from, or in consequence of, or in any way involving seepage, pollution or contamination of any kind."

If the policy does not exclude pollution, cover will usually be restricted in one of the following ways:

1. Sudden and accidental – policy is restricted to cover only liability where contamination is caused by a sudden, unintended and unexpected happening. That is, a claim for gradual pollution or contamination is excluded.

2. Aggregate indemnity limit – if the limit of indemnity is for "any one claim" it may be restricted to an aggregate limit for pollution. This means if the limit is £1M, the insurer will pay a maximum of £1M during the total policy period as opposed to a maximum of £1M for each and every claim.

3. Exclusion and write back – pollution is excluded unless the claim is a direct result of the conduct and execution of your professional business. For example, if the advice you gave was negligent. Again the limit of indemnity is likely to be on an aggregate basis.

Ask the broker to go through the policy in detail. If it does include absolute pollution exclusion or if cover is restricted in line with point 1 above, ask to widen the cover at least in line with points 2 and 3.

Matt Farman is director at insurance broker Howden

One of my clients is complaining about some work I have done. Should I notify my liability insurer straight away?

The first thing to look at is the insurance policy. Most require you to inform the insurer when a situation arises that may lead to a legal claim against you. The wordings of policies vary. However, two common clauses to look out for are: "likely" to or "may" give rise to a claim.

For a circumstance to be "likely" to lead to a claim, there needs to be more than a 50% chance that it will. On the other hand, if your policy stipulates you must notify of circumstances that "may" give rise to a claim, this is a more onerous term. This means a less than 50% possibility should be notified if there is a material risk of a claim against you being brought.

In engineering projects it can be difficult to determine when a complaint might lead to a claim. What looks like a trivial and solvable problem can, on occasion, become more serious. If you consider it probable that a particular client will take the matter further (even if the criticism is unjustified), a notifiable circumstance may arise earlier than if the client is less aggressive.

The consequences of late notification can be severe. Your insurer could refuse to cover you if you fail to notify a potential claim in accordance with the policy terms. If in any doubt, contact your insurer and explain the position.

Katherine Gregory is associate at law firm Henmans LLP

If you have an insurance question you would like answered, please send it to Alexandra Wynne at

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