’These two new clauses are the first of their kind in the UK insurance market,’ says director
Global law firm Kennedys has created a new insurance product to help tackle climate risk.
The firm said in a statement yesterday (25 April 2023) that it had developed two clauses that will allow insurers to offer their commercial clients liability cover for climate-related injury or property damage claims.
Denise Eastlake, legal director at Kennedys and head of the pro bono team that developed the clauses, said the cover comes with “climate-related litigation only going to increase”.
She said: ”It’s been incredibly exciting to have led such a pioneering project, which is pushing boundaries and encourages insurers to think about what new products they can develop to help tackle climate change.
”We are also grateful to Liberty Mutual Speciality Markets for their assistance in the drafting of these clauses.
”It has truly been a rewarding cooperative effort.”
Partnership
The product was made in partnership with The Chancery Lane Project (TCLP).
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This is a global network of over 3,000 legal and industry professionals working together to “create free contractual clauses that make tackling the climate crisis part of the drafting process in all contractual documents”, a statement said.
It encourages authors to name the clauses after children so that they will be drafted with the next generation.
As a result, Eastlake decided to name the new Kennedys product after her two children, Seb and Abby.
Seb and Abby’s clause will work in conjunction with Connor’s clause, which requires policyholders to put in place a net zero transition plan – including emissions reduction targets –before the commencement of cover.
Both clauses will sit alongside more than 120 other TCLP clauses which have been drafted, peer reviewed and then made available for use by organisations, including NatWest, Vodafone and the UK Environment Agency.
Becky Annison, director of engagement at TCLP, said: “Litigation risks against corporations are material and growing.
”We are witnessing a number of climate claims against the private sector which will shape the future of climate litigation and companies wishing to protect themselves must be taking steps now to decarbonise.
“These two new clauses are the first of their kind in the UK insurance market and incentivise companies to implement robust decarbonisation plans.
“We are looking forward to seeing them used in insurance policies to drive industry best practice.”
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