1. piotr.wojcik@gerling.com The Basel Protocol, Warsaw, 18-20.01.2006 Availability of insurance and other financial guarantees: coverage of the liability of the generators, exporters, importers and disposers Piotr Wójcik Liability Department Director

2. piotr.wojcik@gerling.com The Basel Protocol, Warsaw, 18-20.01.2006 what kind of risk must be covered? costs of duties fulfilment duties: to transport and to dispose in accordance with the permission and law duties regulated by Council Regulation No 259/93 and Basel Convention public law: i.e. duties fulfilment is claimed by public authorities after successful fulfilment assurance may be released immediately limit of assurance should be proportional to total predictable costs

3. piotr.wojcik@gerling.com The Basel Protocol, Warsaw, 18-20.01.2006 what kind of risk must be covered? financial compensation of damages arising from wastes transport and disposal mostly regulated by private law (civil code) however private law is not sufficient for damages in the environment as a such (i.e. not the economic value for particular natural or legal person) compensation of damage to the environment as a such additionally regulated by public law environment protection law; partially Basel Protocol, Directive 2004/35/CE on environmental liability very complex damage and liability (private+public) definition damages may be released or claims can be filed many years after disposal has been completed carrier and disposer receives financial income NOW, compensation, i.e. costs can be paid MANY YEARS LATER often regulated by different national jurisdictions possible group claims (for example in 1986 SANDOZ disaster - 1.100 claimants, in Hoechst case - over 5.000) potentially very high liability, requires high limits

4. piotr.wojcik@gerling.com The Basel Protocol, Warsaw, 18-20.01.2006 what risk is covered now? costs of duties fulfilment covered by financial guaranties issued by bank or insurer cannot be covered by traditional insurance there is no accident damages are not covered regulated by Council Regulation No 259/93

5. piotr.wojcik@gerling.com The Basel Protocol, Warsaw, 18-20.01.2006 what risk is covered now? road transport of wastes compulsory liability insurance of cars possessor bodily injury and property damage covered coverage for whole Europe (Green Card system) limits: according law of country of accident NOT COVERED: in Poland - damage to the environment damages caused by other activities, like loading and unloading, disposal, railway transport etc.

6. piotr.wojcik@gerling.com The Basel Protocol, Warsaw, 18-20.01.2006 what risk is covered now? General Third Party Liability Insurance non-compulsory insurance covered bodily injury and property damage not covered: economic loss not resulting from bodily injury or property damage covered sudden and accidental pollution only i.e. gradual pollution (for example small, constant leakage) is not covered damage caused intentionally is not covered private law only covered any future liability arising from damage which happened during insurance period available limits for carriers and disposers: insurance market is very reluctant, depends on type of wastes, up to 1,5 Mio some substances excluded: asbestos, PCB, dioxins environmental damages under US jurisdiction covered in limited scope only

7. piotr.wojcik@gerling.com The Basel Protocol, Warsaw, 18-20.01.2006 main problems in protocol: partially public liability introduced personal injury is much broader than bodily injury example of personal right: right to live in clean environment limits are set per single incident, total number of incidents is not limited so total liability is open gradual damage must be covered very long period of liability new kind of liability is introduced there is no experience necessary for proper risk evaluation and premium calculation liability and insurance must be coordinated with Directive 2004/35/CE on environmental liability rules to avoid two different compulsory insurances for the same environmental damages can be some substances (asbestos etc.) excluded from the coverage? can be intentional damage excluded?

8. piotr.wojcik@gerling.com The Basel Protocol, Warsaw, 18-20.01.2006 what can we do? limit scope of liability introduced by protocol leave scope of liability as it is but private insurance will cover only part of liability the rest will be covered by state? special funds? create insurance pool requires changes of the insurance law it is not sure if we will find sufficient number of insurers willing to participate in the pool

9. piotr.wojcik@gerling.com The Basel Protocol, Warsaw, 18-20.01.2006 thank you for your attention