A theme which currently dominates environmental regulation in Canada is for a
strengthening of the "polluter pays" approach to environmental regulation. This trend sees those
who impair the environment held increasingly financially responsible for their actions through
such mechanisms as a new generation of statutory liabilities which include liability for
environmental response and cleanup charges, the requirement of security in the event of
environmental contamination, and the creation of statutory civil causes of action designed to assist
claimants in recovering for losses resulting from environmental contamination. These
mechanisms are supplemented by an increasing willingness by the courts to give serious
consideration to innovative new approaches by private claimants to hold polluters civilly
accountable for toxic tort related claims.
As a result, those in Canada with potential exposure to this new generation of
environmental liabilities will inevitably turn to the insurance industry for coverage. Ironically,
it is these same new liabilities which will make it increasingly difficult for insurers to provide
the desired coverage. Further, in the event that such coverage is provided, insurers will be
required to be especially diligent in evaluating and delineating those environmental risks which
they are prepared to cover. Many industrial and commercial enterprises will require
environmental impairment insurance in order to carry out operations subject to environmental
risk. Insurers providing environmental insurance in this context will effectively find themselves
cast into the somewhat unlikely role of environmental regulators within Canadian society.
For more than fifty years the insurance industry in Canada has provided a wide range of
insurance products for liability resulting from impairment of the natural environment. In
developing and marketing environmental impairment insurance products the insurance industry
has primarily relied upon the risk-based analysis which it has historically utilized to provide coverage for more traditional insurance products such as fire, automobile, and marine insurance.
However, it is submitted that the attempts by the industry to provide environmental impairment
insurance has been fraught with problems, and the success of the products which have been
provided has been limited. This in turn raises serious questions as to the ability of the insurance
industry to assume responsibility for the regulation of environmental impairment in the future.
It is the primary hypothesis of this thesis that the insurance industry has experienced
significant difficulties in providing environmental impairment liability insurance in Canada, and
that these difficulties are due in large part to the inability of the industry to accurately predict the
incidence of loss associated with environmental impairment in Canada. Further, the difficulties
with prediction experienced by the insurance industry are primarily the result of its failure to take
into account perceptions of environmental risk by the Canadian public and by environmental
decision-makers. Finally, this inability to accurately predict has been accompanied by the failure
of the insurance industry to recognize the problem, resulting in overconfidence by the industry
with respect to its environmental impairment liability products.
| Identifer | oai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:BVAU.2429/4055 |
| Date | 11 1900 |
| Creators | Reynolds, Larry A. |
| Source Sets | Library and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada |
| Language | English |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Relation | UBC Retrospective Theses Digitization Project [http://www.library.ubc.ca/archives/retro_theses/] |
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