Brokers providing Pollution Liability to their clients may need to revisit their policies now that the Ministry of Environment has made a new law under the Pesticides Act.
The new law states that anyone who applies pesticides – whether for farming, landscaping, golf courses, and more – now requires a license to do so. These new regulatory amendments are in effect to reduce the impact that neonicotinoid insecticides have on pollinator health. The regulation includes a new class of pesticides for corn and soybean seeds treated with imidacloprid, thiamethoxam, and clothianidin – collectively referred to as Class 12 pesticides. (1)
These changes to the Pesticides Act and Ontario Regulations 63/09 have a few implications for brokers. First of all, it means the limit of pollution liability required for these operations has increased. Second, to obtain a license, pesticide users now need to show proof of pollution insurance of $2 million.
Background: What is Neonicotinoid?
Also referred to as “neonics,”, neonicotinoids are insecticides derived from nicotine. They act by binding strongly to nicotinic acetylcholine receptors in the central nervous system of insects, causing overstimulation of their nerve cells, paralysis, and death. Although their principal use is in agriculture for seed and soil treatment and on plant foliage, neonics may be used in home yards and gardens, golf courses, and for flea and tick treatments on dogs and cats.
Introduced in Canada in the 1990s, five neonics are approved for agricultural use in Canada. Of these, acetamiprid and thiacloprid are permitted for limited purposes. In April 2019, the Pest Management Regulatory Agency (PMRA) of Canada released a re-evaluation of the three most widely-used neonicotinoid substances: imidacloprid, clothianidin, thiamethoxam.
A Closer Look: New Insurance Requirements
The new law lays out the following new insurance requirements for pesticide use:
- Operators are required to carry insurance for every extermination business they carry out. Insurance must cover the liability of the operator and all of the operator’s employees arising out of any extermination business for death, injury, or property damage. It also must be an amount of not less than $1,000,000 to each employee of the operator provided that the contract of insurance may limit the insurer’s liability under the contract of insurance arising out of any one incident to $1,000,000. Some operators may be exempt from this regulation if they can produce satisfactory evidence that their business is covered under the Workplace Safety and Insurance Act, 1997, and that they are paying all premiums and other amounts due under that Act.
- The contract of insurance must provide comprehensive coverage in an amount of not less than $2,000,000 for death, injury, or property damage arising out of any one incident. It must also provide pollution coverage for the emission or discharge of chemicals into the environment as part of the business operated under the authority of the license in an amount of not less than $1,000,000 for death, injury, or property damage arising out of any one incident.
- If the extermination business involves the application of pesticides from an airborne machine, then the contract of insurance required must provide coverage for liability for off-target pesticide deposition in an amount of not less than:
- $2,000,000 for death or injury arising out of any one incident; and
- $2,000,000 for property damage arising out of any one incident. (2)
Update Your Client’s Environmental Coverage with South Western
Clients in every industry are subject to environmental risk and liability, making the need for a customized pollution insurance program essential in managing their exposures. Our environmental insurance products are designed to provide our clients with the broad coverage they need to protect their business from clean-up costs, defense costs, and legal obligations.
At SWG, we provide customized coverage for Premises Environmental Liability, Contractor’s Environmental Liability as well as coverage for Storage Tanks. In many cases, we can provide all three categories under one customized policy, with limits starting at $250,000 up to $5,000,000.
Visit our website to learn about SWG Enviro.
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