SWG ENVIRO – Preparing Your Client for a Surprise Site Pollution Claim

May 2020

SWG ENVIRO – Preparing Your Client for a Surprise Site Pollution Claim

In December of last year, the Supreme Court of Canada ruled that the forest-product company Resolute was liable for damages from a mercury-contaminated waste disposal site near Ontario’s Grassy Narrows First Nation. A pulp-and-paper facility dumped toxic materials from chemical processing into the waste disposal site, which contaminated the nearby river system in the 1960s. And though the property had changed ownership several times over the last six decades, the federal government denied Resolute’s bid for indemnity and held the company liable for covering the costs of maintaining the disposal site. (1)


In addition, both Resolute and Weyerhaeuser, a company that had bought some of the pulp-and-paper assets in 1998, were obligated by law to repair disposal site erosion, do water testing, file annual reports, prevent any leaks and give the Ontario Environment Ministry $273,063 as financial assurance with respect to the site. (1)


SWG’s Premises Environmental Insurance (PEI) policy is designed to address the risk of pollution arising at a specified premises and can protect against ongoing operational pollution risks, and/or address the risk of legacy liabilities arising from historic operations, which are often a concern on property transactions, mergers and acquisitions.


Overview of Laws Governing Pollution Liability in Canada


In Canada, the federal and provincial/territorial governments are responsible for environmental protection. Key federal laws governing environmental protection include the Canadian Environmental Protection Act, the Fisheries Act, the Impact Assessment Act, the Transportation of Dangerous Goods Act and the Canadian Navigable Waters Act. (2) In addition, each province has its own legislation, for example, British Columbia’s Environmental Management Act or Ontario’s Environmental Protection Act. (2)


Firms will need environmental liability coverage either because of claims for third party damages, or because the contamination on their property has exceeded Action levels. Action levels are determined at a federal or local level, and represent the legally acceptable concentration of any pollutant for a given area where the contamination is discovered.


SWG Enviro: Premises Liability


Because pollution exposures exist at most if not all locations, we’ve designed our coverage to be as broad as possible. Examples of key sectors which are often most at risk of historic or new pollution events occurring at their premises include the following:

● Manufacturing

● Oil and gas

● Petrochemical and chemical

● Pharmaceutical

● Electricity generation, transmission and distribution

● Power and water utilities

● Waste management

● Logistics, transportation, and warehousing

● Real estate

● Healthcare – Retirement Homes, Nursing Homes, etc.

● Education – Childcare, Daycare, etc.


Please contact us if you don’t see the industry you’re looking for.


Highlights of our broad coverage include the following:

● Sudden and gradual pollution events

● Broad definition of pollutant including asbestos & mould

● Illicit abandonment of pollutants

● On-site and off-site clean-up costs

● Restoration costs

● Emergency response costs

● Natural resource damages

● Compensation for third party bodily injury and property damage

● Nuisance claims

● Civil fines and penalties

● Punitive damages, where insurable by law

● Legal defense costs


Optional coverage enhancements include:

● Retroactive cover for historic work

● Transported cargo

● Work conducted off-site at third party facilities

● Waste disposal / Non-owned disposal sites

● Contractual liability e.g. in leases

● Above and underground storage tanks on your premises

Cover is provided on a claims-made and reported basis. Visit our website for more details.


Contentis current as of the date of broadcast and is subject to change without notice.



  1. https://www.canadianunderwriter.ca/legal/supreme-court-rules-on-1985-pollution-liability-indemnification-1004171556/
  2. https://practiceguides.chambers.com/practice-guides/environmental-law-2019-second-edition/canada