Acta academica karviniensia 2011, 11(1):111-121 | DOI: 10.25142/aak.2011.011

INSURANCE CONDITIONS FOR ENVIRONMENTAL LIABILITY

Eva Vávrová

Ing. Eva Vávrová, Ph.D., odborný asistent Ústavu financí, Fakulta provozně ekonomická, Mendelova univerzita v Brně, Zemědělská 1, 613 00 Brno, vavrova@mendelu.cz

Since 2004, the Environmental Liability Directive No. 2004/35/EC is the basic document which has governed liability for damage to the natural environment in the European Union, as amended by subsequent regulation No. 2006/21/EC. The main purpose of the legislation was to ensure that the polluter responsible for the damage pays all costs for rectifying its consequences. If it concerns damage to the natural environment, the operator must undertake measures for rehabilitation, replacement and regeneration of damaged natural resources. Primary replacement, which returns damaged natural resources to their original state, may be differentiated from complementary replacement as compensation in the case in which primary replacement has not provided adequate reparation, and finally compensatory replacement - compensation for temporary loss of natural conditions.
This paper is focused on an analysis of specific presumptions about the insurability of risk as concerns environmental insurance. Scientific paper aims at an analysis of the environmental insurance as a possible mean for eliminating risks due to liability for environmental impairment caused by the actions of an operator whose activities potentially threaten the natural environment and may cause biodiversity damage. There is the EU approach described, and the current demand required by the Directive is explored with respect to its impact on the Czech conditions. Risks are assessed with regard to risk insurability criteria for potential damage to the natural environment. The importance of risk management is stressed in the sophisticated form known as Enterprise Risk Management. Risk management is becoming increasingly important with consistent quantification of obvious, hidden and potential risks.
The paper was written as part of research project MSM 6215648904, carried out by the Faculty of Business and Economics, under the name "The Czech Republic in the processes of integration and globalization, and the development of the agriculture and service sector in the new conditions of the integrated European market", following the goals and methodology of the research project.

Keywords: insurance market, commercial insurance company, insurance product, environmental insurance, insurability, liability insurance, risk management

JEL classification: G15, G22, Q5

Published: March 30, 2011  Show citation