The Bartoline Extension

Incidents happen and thankfully most of these incidents don’t lead to anyone being seriously injured.  The environmental damage can, however, be significant.  Sometimes you need to think about the wider implications of your business’s risks.  This is an example of why…….

Bartoline manufactures a number of items for the home improvement market including solvents and wood care products.  A fire at the company’s premises on 23rd May 2003 lead to significant pollution as chemicals were washed into two local watercourses.

The Environment Agency used its statutory powers under the Water Resources Act 1991 to carry out emergency work to minimise environmental damage and to remove and dispose of contamination.  The Agency then sought to recover costs from Bartoline.

The total costs of the clean up operation, including the requirements the Agency made of Bartoline themselves, amounted to over three quarter of a million pounds.

Bartoline made a claim for these expenses under its public liability policy. Royal and Sun Alliance (RSA), Bartoline’s insurers, refused indemnity, stating that the expenses incurred did not fall within the scope of the policy.

Bartoline took RSA to court in 2006, alleging breach of contract, seeking clarification of the legal meaning of the term "damages" in an insurance context. The judge, however, found in favour of RSA.  The judgement was, in essence, that the liability for damages is based on an actionable wrong. Bartoline’s liability to the Environment Agency was statutory and the money owned to the Agency was a debt.

As a result of this ruling, liability insurers may now provide a “Bartoline extension”, covering the insured for limited costs of clean up required by environmental authorities.

Our Hazardous Haulage Scheme includes a “Bartoline extension”.  If you are concerned about and want to insure against any risk your business may be exposed to in relation to potential environmental damage, please give me a call.