Environmental impairment liability (EIL) insurance first appeared on the market in the mid-1970s. This first-generation coverage for environmental hazards emerged as an increasing number of businesses facing liabilities resulting from gradual pollution incidents were unable to obtain coverage under their general liability policies. While the availability of EIL insurance was expected to surge in response to the growing awareness of environmental hazards and federal laws designed to regulate hazardous waste—and, for a short time it did—the mid-1980s saw an abrupt disappearance from the market of EIL insurance products as fewer and fewer insurance companies were able to keep pace with the number of environmental claims and the often exorbitant costs of those claims. When coverage for environmental hazards reemerged in the 1990s and the first part of the twenty-first century, the products available were more specialized, the underwriting more detailed, and the targeted policyholders more varied, resulting in a sustainable market niche.
This chapter will discuss the origins and evolution of EIL insurance and conclude with a discussion of the primary pollution liability coverage products for site-specific environmental risks presently on the market.