The following text field filters the results that follow as you type.
Olivia Hogan, senior environmental underwriter at Markel International explains why environmental risks continue to test businesses.
Published on June 26, 2026
By Olivia Hogan
Originally published in Emerging Risks, 26 June 2026:
Environmental risk rising up the agenda
7-minute read
Environmental risk management is coming into sharper focus for businesses operating across the UK. Historically, environmental liability risk was viewed as a specialist concern. However, that assumption is becoming harder to sustain as exposures emerge across a wider range of sectors and regulatory expectations continue to evolve.
Environmental, Social and Governance (ESG) has become increasingly central to boardroom discussions and business strategy. Combine this with stakeholder pressure to protect the balance sheet, preserve reputation and comply with regulation, and it becomes clear that the importance of environmental risk has never been greater.
Although there may be a perception that the greatest environmental exposures sit primarily within heavy industry, risks can emerge across many sectors and activities. Construction firms, transport operators, agricultural businesses and companies handling everyday materials could all face exposures that they have not fully considered.
Construction firms may encounter historic contamination when developing brownfield sites, while transport and agricultural businesses can face liabilities if products, waste or runoff enter the environment.
These industries may be subject to UK environmental regulations that apply strict liability principles, placing responsibility on organisations to remediate pollution regardless of intent.
Taken together, environmental risk is rarely straightforward. Therefore, understanding the nature of the risk, where exposures exist and the scope of existing protection is essential for UK businesses, irrespective of size and sector.
Assumptions around existing cover may leave gaps
Many businesses have some degree of pollution protection within existing general liability or property policies.
The challenge is that without an environmental liability policy, cover can be narrower than organisations expect.
General liability policies will often only respond to certain pollution events where the release is sudden and accidental, such as an immediate spill following an incident.
Where cover applies, it is typically focused on third-party impacts.
Policies may offer less protection for pollution clean-up on a business’s own site – despite this often being one of the most expensive parts of an incident. Another issue is that pollution cover within general liability policies can be time-limited. For example, cover for a sudden and accidental event may only apply if the incident is reported within a set period.
That can create practical problems. If an incident occurs on a Friday evening and is not discovered or reported until staff return on Monday, businesses may find themselves outside the notification window, potentially impacting their cover.
Overall, it is essential organisations understand the details of their general liability cover and how this would compare against a full environmental liability policy.
Property insurance gap
Cover may also be narrower than an organisation might expect under its property insurance.
Property insurance may respond where pollution follows standard insured events, such as fire, flood or storm damage causing physical damage to a site.
However, protection for standalone pollution affecting a business’s own site, along with clean-up obligations imposed by regulators or authorities, is likely to be limited – if covered at all.
Underestimating risk
It is not just the level of protection that needs careful understanding but also the nature of the risk.
Gradual pollution is one of the biggest hidden dangers.
For example, a leaking underground storage tank may develop slowly over months. A tiny defect, barely visible, can allow contamination to move into soil and groundwater long before anyone notices.
It is pertinent for organisations to understand how policies would respond to gradual pollution, delayed discovery events and evolving environmental standards.
By the time discrepancies appear or testing takes place, the damage may have spread – and at that stage, costs rise quickly.
Delayed discovery creates another issue – establishing responsibility. Historic contamination can create disputes over who caused the issue, when it began and who should ultimately bear the cost of remediation.
It is also possible to underestimate the extent to which environmental standards have evolved over time.
Substances such as per- and polyfluoroalkyl substances (PFAS) have received increasing scrutiny in recent years, while expectations around acceptable contamination levels have changed.
Long-term cost consequences
In the event of an incident, the long-term cost consequences can be significant, going well beyond the original fine.
Businesses may instead face long-term monitoring requirements, with regulators requiring ongoing testing or oversight for months or years to ensure contamination has been fully addressed.
Environmental incidents may also disrupt business activity, with delays and uncertainty continuing long after the original event.
Damage to reputation can cause long-term harm to an organisation, particularly where pollution affects local communities or attracts public scrutiny.
The true cost of an environmental incident is often measured over years rather than days.
Proactive risk management
There is a great deal to consider around environmental risk, but there are practical steps organisations can take.
They should start by identifying their environmental exposures, including storage systems, waste handling, ageing tanks and underground equipment, rather than focusing only on obvious pollution risks.
Next, organisations should assess source, pathway and receptor – where pollution could originate, how it might spread and what people, property or ecosystems could be affected by it.
Finally, organisations should review existing insurance carefully. They should understand how pollution is defined within policies and assess whether current cover would respond adequately to an environmental loss.
An appropriate environmental liability policy will likely provide protection against a broader range of exposures than businesses can expect under general liability or property cover alone.
Depending on the environmental liability policy, this can include pollution clean-up on a company’s own site, third-party environmental damage, remediation costs, emergency response expenses and ongoing monitoring requirements.
Following an incident, some policies may also respond to business interruption impacts, specialist support costs and reputational management.
The breadth of cover varies. It is pertinent for organisations to understand how policies would respond to gradual pollution, delayed discovery events and evolving environmental standards.
Building resilience
There is a lot for organisations to consider when it comes to environmental risk management, but the effort will likely result in positive outcomes.
Greater awareness of risk and a clearer understanding of protection can help organisations strengthen resilience and support business continuity.
If an incident does occur, organisations may be better placed to respond confidently and recover more effectively.
Olivia Hogan
Senior Environmental Liability Underwriter