LONDON, 6 October 2010 The unfolding disaster in Hungary, in which toxic sludge escaped from a failed reservoir belonging to an industrial company, should serve as a warning to companies with industrial operations in Europe that the Environmental Liability Directive (ELD) leaves no place to hide, according to Aon, the world’s leading insurance broker and risk management advisory.

Under the ELD, all companies have a liability and many because of the nature of their operations do not even have to be at fault if the environment is damaged due to the actions of a company.

Simon Johnson, Aon Risk Solutions’ environmental director for the UK, Europe, Middle East and Africa, commented: “While most companies are good corporate citizens and take risk management with regards to the environment extremely seriously, occasionally accidents or incidents beyond anyone’s control can happen. Under the ELD, which has some extremely strong teeth, it is entirely possible that an accident such as the tragedy in Hungary could ultimately lead to the total collapse of the company at fault if they do not have suitable insurance coverage in place.

“In this instance, there is a serious threat to the environment and for contamination including the Danube, which could lead to serious environmental damage in other countries. If the company responsible for the original damage were to collapse, it is not unimaginable to imagine a scenario in which one country seeks another to pay for the subsequent costs of cleanup. Current estimates are that it will take at least a year and tens of millions of Euros.

“It is absolutely vital that companies are explicitly aware of the risks their operations pose and the financial exposure they face should something go wrong, no matter how remote the possibility. When working with our clients we advise them to take a comprehensive environmental insurance programme. There is a mature insurance market for these types of risks, and it is entirely possible to get insurance coverage for up to €150 million for an individual risk. It is worth being aware that when buying insurance, this doesn’t simply pay for the financial compensation you will receive, but also gives you access to experienced professionals who can advise the best way to mitigate damage. Without insurance, dealing with the aftermath of a disaster is completely down to the resources already within a company, something many firms simply will not be prepared to cope with.”

 Ends

For more information contact:
David Skapinker
020 7505 7478
David.skapinker@aon.co.uk
http://aon.mediaroom.com

About Aon
Aon Corporation (NYSE: AON) is a leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. Through its more than 59,000 colleagues worldwide, Aon delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally through more than 500 offices in more than 120 countries. Named the world's best broker by Euromoney magazine's 2008, 2009 and 2010 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's largest insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on brokerage revenues in 2007, 2008 and 2009, and Aon was voted best insurance intermediary, best reinsurance intermediary and best employee benefits consulting firm in 2007, 2008 and 2009 by the readers of Business Insurance. Visit http://www.aon.com for more information on Aon and http://www.aon.com/unitedin2010 to learn about Aon’s global partnership and shirt sponsorship with Manchester United.

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