Business Owners: Environmental Lawsuits May Sink You

It’s a nightmare scenario: You’ve spent your life building your business into a largely successful operation, when there’s an accidental chemical spill on your property. How can you, as a business owner, be prepared for this and other unforeseen environmental legal issues?

Environmental attorney Ted A. Warpinski notes that the first thing a business owner should know is the EPCRA, or Emergency Planning and Community Right to Know Act. The law demands that a lot of information to be reported to the public: local governments need to have plans for any negative releases; companies have to report their releases to the local data processing of the government.

Business owners must report these releases every year, and this information must be available to the public. The result is that communities will be kept in the loop. “This also offers an incentive to businesses to conduct their operations in a way that is open to the public,” says Warpinski. “Today, there is a lower likelihood of a major release due to mishandling of chemicals, because of all of these regulations. There is an opportunity for consumers to know what’s going on but also, businesses have incentive to comply.”

While not all businesses are required to comply with every piece of the regulation, the law does give a framework for what a reasonable business owner should do to prevent exposure that may lead to litigation.

Business owners should further beware that insurance will most likely not cover pollution-related incidents. “Unless you are a highly sophisticated business, and buy pollution liability coverage for yourself, you will likely be uninsured due to an absolute pollution exclusion in your policy,” says Warpinski.

The attorney recommends businesses due environmental audits of their facilities to determine whether they’re compliant or not. This can, in most cases, be done with attorney-client privilege, where an attorney points out issues and a business owner voluntarily discloses to regulators where they have shortfalls. This can, in the long run, lower fine amounts and penalties, and let you know if you’re at risk for an incident.

“If you have storage tanks or chemicals involved in your processes, there is a good chance that you face some risk,” adds Warpinski. “A business can always benefit from having some sort of assessment as to whether they are in compliance with the current government regulations.”

Even if you’re a business owner looking to be more environmentally friendly, you may still be dealing with hazardous waste. “Green technologies have their impacts, too,” says Warpinski. “People who are next to businesses with entirely green techs have dealt with noise from windmills, and frac sand, which is considered a more-green energy.”

No matter what industry your business is in, it only benefits you to have a reputable and experienced environmental attorney help protect your investments and business’ future. For more information on this area of law, see our overviews of environmental law and business litigation.