SINGAPORE Law and Practice Contributed by: Joseph Chun, Shook Lin & Bok LLP
8. Insurance 8.1 Environmental Insurance
emitted pollutants or caused or permitted such dis- charges/emissions unless they prove to the contrary (eg, under the EPMA). They may also be tortiously liable in negligence or nuisance for environmental damage in the same way as operators or occupiers (see 5.1 Key Types of Liability ). 9.2 Lender Protection Lenders usually require borrowers to provide con- tractual representations, warranties, and indemni- ties regarding compliance with environmental laws. Borrowers must confirm that they are unaware of any existing land contamination, enforcement notices, or ongoing litigation related to liability for environmental damage. Additionally, lenders expect borrowers to maintain adequate environmental insurance to cover any potential contractual liabilities that may arise. Lenders also require borrowers to agree that any receiver appointed to take possession or control of the borrowers’ assets or business in order to recover owed money acts as an agent of the borrowers, not of the lenders. Lenders may also require environmental due diligence on the borrowers’ business and assets. 10. Civil Liability 10.1 Civil Claims Civil claims for compensation or other remedies that may be brought under tort include: • private nuisance – when a person’s conduct unreasonably interferes with another person’s use or enjoyment of property rights over the latter’s land (eg, when a facility produces excessive noise, odour, pollution and prevents the neighbours from enjoying their land); • public nuisance – when a person’s conduct causes common injury, danger or annoyance to the public or a large section of the public (eg, when a facility produces widespread excessive noise, smoke or pollution to the atmosphere); • negligence – when a person owes another person a duty to the latter to conduct an activity carefully, and fails to conduct the activity in a way that meets
Environmental insurance is available in Singapore to cover liabilities such as environmental impairment lia- bility, pollution legal liability, covering risks including: • first-party remediation/clean-up costs; • third-party liability for bodily injury or property damage due to pollution; • legal defence/investigation costs; and • contractors’ operations. Generally, there are no mandatory environmental insurance requirements for companies. However, NEA has the authority, with the Minister’s approval, to cre- ate regulations that may require owners or occupiers of industrial or trade premises, as well as individu- als who handle, store, transport, or use hazardous substances, to obtain and maintain insurance policies under the EPMA. Before NEA issues an export or import permit for hazardous or other waste, it must be satisfied that the applicant has appropriate insurance (reasonably insured against risks that might arise in relation to the hazardous or other waste concerned, and that the applicant will be able to discharge any liability that might arise in relation to the hazardous or other waste concerned if the permit were granted), per HWA. Some policies may exclude or limit coverage for fines, penalties, or punitive damages. Financial institutions (“FIs”) that do not take posses- sion or operational assets are unlikely to be liable for environmental damage or breaches of environmental law. If FIs take possession or operational control, they may be criminally liable for discharges/emissions of pol- lutants into environmental media, or for causing or permitting such discharges/emissions. As occupiers of land, they may be presumed to have discharged/ 9. Lender Liability 9.1 Financial Institutions/Lenders
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