ENVIRONMENTAL INSURANCE AS A MINIMIZATION MECHANISM OF COMPANIES’ ENVIRONMENTAL LIABILITY

Abstract

The goal of this study is to investigate the functioning of the environmental risk insurance as a mechanism to reduce or eliminate environmental liabilities, as well as its application in the Brazilian market. The national insurance market offers a wide range of coverage for risks of environmental pollution. The policies have different coverage, both against recurring risks and risks of sudden pollution events, which according to Durço (2001, p. 4) generate environmental disasters with wide repercussion, which persist for a long period. The research method used was the empirical-analytical approach which emphasizes practical study with data collection. In order to conduct this research, questionnaires were sent to 71 Brazilian insurance companies, members of the National Insurance Industry Association (FENASEG). The results indicate that the level of insurance against environmental risks offered in Brazil, as a mechanism to help minimizing environmental liability, is still being small due to several difficulties faced by the insurance market to operate with this type of coverage. Thus, we conclude that there is a need for increased knowledge in the Brazilian insurance market regarding underwriting environmental risks and more complex coverage, to satisfy the needs of companies to reduce their exposure to this type of risk.