Environmental Liability Insurance (ELI) Policy
The site may be covered under an Environmental Liability Insurance (ELI) policy, which provides financial protection against claims arising from pollution incidents, environmental damage, or regulatory non-compliance. This type of insurance typically covers:
- Third-party bodily injury or property damage due to contamination
- Clean-up and remediation costs for accidental spills, leaks, or hazardous discharges
- Legal defense expenses in case of environmental lawsuits or regulatory actions
- Gradual pollution coverage, depending on the policy terms
Such policies are often purchased by the property owner, developer, or industrial operator and are recommended during and after construction phases.
Public Liability Insurance for Hazardous Substances (PLI Act Coverage)
If the industrial activity involves handling of hazardous materials, the owner is required to obtain Public Liability Insurance under the Public Liability Insurance Act, 1991. This mandatory policy provides:
- Immediate relief in the event of an accident involving hazardous substances
- Compensation for death, injury, or damage to third parties caused by such incidents
- Compliance with statutory requirements for operating industrial units under environmental laws
Proof of this insurance is generally required during the Consent to Operate (CTO) approval from the State Pollution Control Board.
General Property and Construction Insurance with Environmental Extensions
During development or operational stages, the property may also be covered under:
- Contractor’s All Risk (CAR) or Industrial All Risk (IAR) policies with environmental damage riders
- Coverage for accidental pollution during construction, excavation, or demolition
- Third-party liability in case of environmental nuisance, noise, or dust emissions affecting neighboring plots
These policies may offer limited environmental coverage but are often supplemented by dedicated ELI policies for full-risk protection. Buyers and investors are advised to review the existing insurance portfolio and ensure that specific environmental liability clauses are included and active.