What Is Environmental Liability Insurance in Canada?

Environmental liability insurance is specialized, policy-defined coverage for selected pollution and contamination risks. Depending on the form, it may cover third-party bodily injury or property damage, cleanup costs, defence expense, emergency response or business interruption. It is not one standard Canadian product, and it does not eliminate regulatory responsibility for a contaminated site. Commercial general liability and property policies can contain pollution exclusions, limited exceptions or separate sublimits. The result turns on the exact wording, event and province. A business should not assume either that all pollution is excluded or that a “sudden and accidental” event is automatically covered. Environmental coverage is designed to address selected gaps through a dedicated policy or endorsement.