Climate clause

General Condition to Commercial Insurance Policies: Climate Change Risk Assessment

Kitty's Clause

A clause requiring companies to carry out a climate change risk assessment, to be inserted into the General Conditions of corporate insurance policies across all lines of business.

This is a climate clause

This clause brings climate considerations to your drafting. It is not yet net zero aligned. To align this clause with net zero, use our toolkit or join one of our events.

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Why use this?

This clause prompts corporate policyholders and insurers to assess the climate-related risks posed to a policyholder’s business. In doing so, it brings climate-related risks to businesses to the fore for corporate policyholders and their insurers which in turn builds sector familiarity (in identifying and managing climate-related risks), refines market understanding and influences market behavioural norms in relation to managing and mitigating climate-related risks.

The clause

Additional Definition

Climate Professional means an appropriately qualified environmental, sustainability or climate consultant who has the skills and experience to diligently, competently and professionally assess the climate-related risks relevant to an organisation.


General Conditions to the Policy

Climate Change Risk Assessments

You will nominate and instruct an appropriately qualified Climate Professional to carry out a climate change risk assessment using the form* provided to You by Us within six (6) months of the inception of cover under this Policy[, using reasonable endeavours to complete the form accurately and completely in good faith]. [You will present the climate change risk assessment to Your Board of Directors for review.]

* [Drafting note: Pro forma depends on estimated turnover of insured i.e. basic process for a small or medium enterprise (SME) graduating up to an assessment in line with TCFD guidance for larger companies (bands to be confirmed). See Tilly’s Clause (Climate Checklist for Prospectuses and Other Public Offering Documents) for a simpler alternative to full TCFD disclosure.]

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