Covers victim compensation, clean-up and restoration costs under the Environmental Damage Relief Act. Designated facilities (Classes 1–3) are subject to a statutory duty to insure.
N2N Insurance Brokerage does not represent any single insurer — it independently represents the client as an FSS-registered broker (Reg. No. 2026-012201). We compare the wordings, rates and service of AIG · Chubb · DB · Hyundai · KB · Meritz to propose the cover and price best suited to your risk. Each insurer's full wording is provided at application and binding.
Environmental liability insurance covers, under the Act on Liability for Environmental Damage and Relief Thereof (Environmental Damage Relief Act), the legal liability and the clean-up and restoration costs arising when air, water, soil or marine pollution harms third parties or the environment.
Under the Environmental Damage Relief Act, operators of designated facilities (Class 1–3 sites under Article 2 of the Enforcement Decree) are subject to a statutory duty to take out insurance or contribute to the fund.
Designed to meet the statutory minimum limits by site class 1–3 (KRW 30–200 billion as of 2024).
Cover can be designed not only for sudden accidental pollution but also for gradual pollution.
Covers soil and groundwater clean-up, ecosystem restoration costs and debris removal.
Cover can be extended to spill incidents while transporting hazardous chemicals.
Class 1–3 air, water, waste and hazardous-chemical sites (statutory duty).
Sectors with the potential to discharge pollutants.
Everyday-service sectors that carry soil and groundwater pollution risk.
| Policy period | 1 year (Claims-Made basis) |
|---|---|
| Payment | Single (annual) or instalment payment |
| Insurers | Chubb · DB · KB · Meritz · Hyundai |
| Channel | Individual consultation with our broker (010-5755-6465) |
| Turnaround | 10–14 business days (environmental survey review) |
If the insured event has already occurred at the time the contract is made, the contract is void. However, where the contract is void due to the company's intent or negligence, or where the company knew or could have known of the nullity before acceptance yet did not refund the premium, the company refunds the premium with interest at the policy-loan rate published by the Korea Insurance Development Institute, compounded annually, for the period from the day after payment to the day of refund.
The specific losses not covered (exclusions) are set out in each insurer's policy wording and product description; on this page, see the “Cover” tab(or the “Losses not covered” section) for the main exclusions. For other cover-specific grounds on which claims are not paid, please refer to the policy wording.
The company provides cover, in accordance with the policy, from the time it accepts the application and receives the first premium. Where the company accepts the application after receiving the first premium with it, cover also begins from the time the first premium was received.
The application must be completed by the policyholder, and the policyholder and the insured must sign it by hand. Failure to sign by hand may result in disadvantages regarding the validity of the contract. On an internet cyber-mall, an electronic signature may be used instead.
The policyholder has the right to be given and have explained the information needed about the product they wish to buy.
The insurer and N2N Insurance Brokerage must explain the important matters of the product to ordinary financial consumers.
When applying, the policyholder, the insured or their agent must disclose truthfully the facts they know regarding the questions in the application (including the questionnaire). Otherwise the claim may be declined or the contract cancelled. Where insurance is taken out by telephone or other means of communication, the duty is performed by answering the seller's questions, which are recorded, without a separate written questionnaire, so answers must be given with particular care.
If, after the contract is made, any of the following arises in respect of the subject-matter insured, the policyholder or the insured must notify the company in writing without delay and obtain endorsement on the policy.
The surrender value is the amount paid if the contract is cancelled early. Unlike bank savings, insurance combines risk protection and savings: part of the premium is paid out as claims to other policyholders who suffer accidents, and part covers the insurer's operating expenses, so the surrender value on early cancellation may be less than the premiums paid, or nil.
Under Article 59-4(1) of the Income Tax Act (special tax credit), for protection-type insurance taken out by an employee only, a tax credit of 12% of the premium paid (capped at KRW 1 million per year) is available. Tax matters may change with amendment or repeal of the relevant tax law.
Except as provided by law, the insurer and N2N Insurance Brokerage do not collect, use, inspect or provide personal data related to this contract — for its conclusion, maintenance and claim payment — without the consent of the policyholder, the insured or the beneficiary. However, for those purposes the insurer may, with the consent of the policyholder and the insured and in accordance with law, provide personal data to other insurers and insurance-related bodies.
The above is a summary and excerpt of the policy wording; for grounds on which claims are not paid and other details, please refer to the policy wording and product description.
Common risk patterns at pollution-exposed sites — a five-scenario self-check
The Environmental Damage Relief Act imposes on operators of designated facilities a statutory duty to take out insurance or contribute to the fund to compensate environmental-pollution harm.
Manufacturing processes that handle pollutants are exposed to both accidental and gradual pollution risk.
Everyday-service sectors also bear soil and groundwater pollution risk from fuels and chemicals.
A hazardous-chemical spill in transit can spread into wide-area pollution damage.
Pollution arises not only from sudden accidents but also gradually over a long period.
There are two things companies most often miss in environmental incidents. First, pollution does not arise only from sudden accidents (abrupt pollution). Gradual pollution that seeps slowly into soil and groundwater over a long period is also a major risk, and whether to include it must be designed separately. Second, the cost of an environmental incident is not limited to damages payable to victims. Clean-up and restoration of polluted soil, groundwater and ecosystems, and emergency containment and leak-control costs, can be as large as the damages. Meanwhile the Environmental Damage Relief Act places a statutory duty on operators of designated facilities to insure or contribute to the fund, and sets statutory minimum limits by site class.
Source: (standard insurance-textbook scenario)
The wording and structure points decision-makers most often overlook
Pollution arises not only from sudden accidents but also as gradual pollution. Check whether gradual pollution is included in the cover.
Beyond damages to victims, a pollution incident brings clean-up and restoration costs for soil, groundwater and ecosystems. These must be adequately reflected in the cover scope and limit.
The Environmental Damage Relief Act sets statutory minimum limits by site class. Check which class your site falls into and what limit is required.
The questions asked most when considering environmental liability insurance
The Act on Liability for Environmental Damage and Relief Thereof (Environmental Damage Relief Act) imposes on operators of facilities designated by the Ministry of Environment (Class 1–3 sites under the Enforcement Decree) a statutory duty to take out insurance or contribute to the fund to compensate environmental-pollution harm. The applicable criteria differ by site class, so this should be checked against the relevant law.
It covers damages for environmental-pollution harm to third parties’ person or property, the government’s relief benefits and recovery claims under the Environmental Damage Relief Act, clean-up and restoration costs for the polluted area, emergency containment and leak-control costs, and the costs of responding to regulatory investigations.
Pollution arises not only from sudden accidents (abrupt pollution) but also as gradual pollution progressing slowly over a long period. Whether gradual pollution is included depends on how cover is designed, so this should be checked.
Clean-up and restoration of polluted soil, groundwater, sea and air, and emergency containment and leak-control costs, make up a large share of an environmental incident. Check that these are reflected in the cover scope and limit.
The Environmental Damage Relief Act sets statutory minimum limits by class of designated facility. Check which class your site falls into and what limit is required, against the relevant law and enforcement decree.
The insurer calculates it based on the site class and industry, the pollutants handled, the limit and cover scope (abrupt and gradual pollution, etc.), and past incident history. The exact premium and terms are confirmed after underwriting by insurers such as AIG, Chubb, DB, Hyundai, KB and Meritz.
