Newsletter
LIABILITY INSURANCE FOR BUSINESSES HANDLING TOXIC CHEMICALS
Under Article 12 of the Toxic Chemical Sub-stances Control Act, businesses engaged in op-erations involving toxic chemicals must take out third party liability insurance to cover the risks of such operations.
The Environmental Protection Administration recently announced requirements for third party liability insurance to be taken out by businesses handling toxic chemicals, with effect from 1 July 2005. Any entity that manufacturers, uses, stores, or transports toxic chemicals in the designated quantities must take out third party liability in-surance within three months from 1 July 2005. An entity that fails to do so will be subject to administrative fines of NT$1 million to NT$5 million, and will be ordered to rectify the situa-tion within a set period. If failing to comply again, it may be ordered to suspend operations, or close down, and/or have its registration or license revoked.
The required insurance coverage is as follows:
Minimum insured amounts:
1.Per death: NT$2 million.
2.Per incident involving death or injury: NT$70 million.
3.Per incident involving damage to property: NT$10 million.
4.Cumulative insured amount over the in-sured period: NT$160 million
The insurance must cover injury, disablement, death, or property damage suffered by third parties due to unforeseen incidents on the premises of the entity or in the course of transportation, or arising out of control and rescue measures for such incidents.
The toxic chemical handling entity must bear an excess in the amount defined by the in-surance policy for liability arising out of each incident. The excess must be not less than NT$100,000, and is to be negotiated on a case-by-case basis with the insurer in accor-dance with actual conditions.
Insurance premiums should be negotiated on a case-by-case basis in accordance with the risk associated with the toxic chemical substance operations.