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Protect Environment and Business, and Keep Contamination Risks at Bay

Date Published 12.09.2019
Topic Press Releases

Protect Environment and Business, and Keep Contamination Risks at bay

Flourishing projects in many non-financial sectors in the last five years have brought not only benefits, but also environmental problems.

The Jakarta Environment Agency said in 2017 that air pollution in the capital was dominated by particles of dust coming from development projects. The agency recorded in 2017 that fine particulate matter with diameter of less than 2.5 micrometers, or PM 2.5. Dust particles of PM 2.5 are also known as silent killer as the particles can penetrate pollution masks and are inhalable.

In addition to physical projects, land transportation, trash burning and industrial waste also contribute to pollution. In the most recent incident, Cikarang river and Cikarang Bekasi Laut river were found to have been contaminated by hazardous and toxic waste (B3). Environmental damage inflicted by the contamination in the two rivers, of course, are costly.

Law No. 32/2009 on Environmental Protection and Management (UU PLH) requires every individual that causes pollution and/or environmental damage to mitigate the contamination and recover the environment. The law’s Article 59 also stipulates that every individual that produces hazardous and toxic waste from its production activities must manage it.

Anyone or any company found to have dumped their waste and have caused death or material damage to locals living nearby may face imprisonment and fine, according to Article 104 of the law. As focus on environmental damage increases, environment related insurance products may become an important and useful tool to protect companies from the cost of contamination risks and keep their businesses moving.

AIG Indonesia supports its customers with its Environmental Insurance, to cover companies’ business and operations pollution risks. Environmental insurance offers 2 protection solution, namely Contractors Pollution Liability and Pollutions Legal Liability.

Contractors Pollution Liability covers contractors or consultant agencies from pollution risks resulting from their works, including third-party bodily injury suffered by locals living nearby their projects. The product also provides coverage of third-party property damage and contamination risks in the future.

Pollution Legal Liability gives businesses more comprehensive protection from pollution risks. The coverage includes protection from all kinds of pollution, environmental damage clean-up, emergency response to pollution, and offsite activities associated with the business.

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