Climate-Related Liability Cover (Commercial Insureds)
Seb & Abby's Clause
Seb & Abby's Clause provides cover for climate-related injury and/or property damage in commercial insurance policies.
Why use this?
Seb & Abby's Clause fills a gap in the UK insurance market, where there is currently no specific insurance cover for climate-related liability property damage or personal injury claims - i.e. climate-related injury or property damage caused/ contributed to by the policyholder's business.
How to use this clause
Disclaimer - please read
The clauses on this website have been prepared in good faith on a pro bono basis and are free to download and use. The clauses have been drafted and edited by a variety of lawyers and, as such, the approaches to drafting may not conform to any particular drafting norms. We acknowledge this as a consequence of the collaborative drafting process.
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The clause
[Drafting note: Consider using Seb & Abby’s Clause with the condition in [Connor’s Clause] Condition to Liability Cover for Climate-Related Claims (Commercial Insureds).]
Climate-related claims liability section
Additional definitions
Business means the business specified in the Schedule.
Climate Change means ‘change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods’, as defined in Article 1(2) of the UN Framework Convention on Climate Change 1992.
Climate-related Damage means loss, damage or destruction arising from Climate Change.
Climate-related Injury means bodily injury or death arising from Climate Change.
Period of Insurance means the period of insurance stated in the Schedule.
Territorial Limits means the territorial limits stated in the Schedule.
[Drafting note: Capitalised terms relate to either a defined term in this clause or a defined term in the main policy document that this clause is designed to be inserted into.]
Additional clauses
1. Cover
1.1 [Subject to the terms and conditions of this policy of insurance] The Insurer will indemnify the Insured against legal liability to pay compensation and claimants’ costs and expenses in respect of Climate-related Injury or Climate-related Damage occurring within the Territorial Limits during the Period of Insurance in connection with the Business.
1.2 In addition the Insurer will pay costs and expenses incurred by the Insured or with the written consent of the Insurer in connection with the defence of any claim which may be the subject of indemnity under this Section.
[Drafting note: Consider whether legal costs are to be in addition (as drafted) or included within the damages limit of indemnity. Alternatively, a costs inclusive clause could be restricted to certain jurisdictions – such as the USA.]
2. Limit of Indemnity
[Drafting note: See Seb & Abby’s Clause – Essential notes and guidance for notes regarding use of an aggregation clause.]
[EITHER]
The Insurer’s total liability for all compensation payable in respect of any one occurrence, or all occurrences of a series consequent on or attributable to one source, shall not exceed the [Per-Claim] Limit of Indemnity stated in the Schedule. The Insurer’s total liability for all compensation payable shall not in any event exceed the Total Limit of Indemnity stated in the Schedule.
[OR]
The Insurer’s total liability for all compensation payable shall not in any event exceed the Total Limit of Indemnity stated in the Schedule.
3. Conditions
[Consider using other appropriate policy conditions and/or the following Chancery Lane Project clauses as conditions:
(a) [Connor’s Clause] Condition to Liability Cover for Climate-Related Claims (Commercial Insureds) (as amended to be a condition precedent, not an exclusion)
(b) [Kitty’s Clause] General Condition to Commercial Insurance Policies (Climate Risk Assessment)/ [Lovisa’s Clause] Climate-Related Knowledge Sharing Between Insurer and Insured
4. Exclusions
[Drafting note: Consider standard public liability exclusions – not incorporated here for simplicity e.g. exclusion for defective products/ workmanship.]
[Drafting note: Consider reviewing the insured’s transition plan prior to inception unless using Connor’s Clause which requires a net zero transition plan (as defined in Connor’s Clause).]
Glossary references: Climate Change