insurance-disclosure-and-mitigation-of-pending-climate-change-litigation.md

title: "Insurance: Disclosure and Mitigation of Pending Climate Change Litigation" excerpt: date: 2024-03-27T14:17:16Z modified: 2025-07-23T11:24:20Z file_type: md permalink: clauses/insurance-disclosure-and-mitigation-of-pending-climate-change-litigation.html wpid: 2183 status: publish type: clause jurisdiction:

• England & Wales maintenance-status:
• Not maintained practice-area:
• Insurance eleventyComputed: clause_child_name: "Cassie's Clause" clause_summary: A clause ‘extending’ insurance policies to cover pending climate change litigation, on the condition that the policyholder discloses its net zero targets and climate risk exposure. clause_last_updated_date: 2021-09-29 layout: layouts/clause.njk

Insurance: Disclosure and Mitigation of Pending Climate Change Litigation

Child’s name

Cassie's Clause

Summary

A clause ‘extending’ insurance policies to cover pending climate change litigation, on the condition that the policyholder discloses its net zero targets and climate risk exposure.

What this clause does

This clause gives policyholders certainty over whether (and to what extent) climate change litigation related to past business activity will be covered/excluded from the scope of their policy(ies); reduces (re)insurers’ exposure to protracted involvement in litigation for which there may or may not be express policy cover; and strengthens the commercial relationship between (re)insurers and policyholders through collaborative working despite legal uncertainties impacting their contractual obligations (without necessarily relying on blanket exclusions of cover / risking early coverage denials).

Clause Content

Pending Climate Change Litigation Extension

Subject to the payment of the Additional Premium as detailed below, this Policy is extended to indemnify the Insured [and/or any Additional Insureds as specified in this Policy] for Pending Climate Change Litigation, subject to the terms and conditions listed below (this “Extension”).

Indemnification Sum

Under this Extension, the Insurer[s] will indemnify the Insured [and/or Additional Insureds] for any sums that the Insured may be legally liable to pay as a result of a Pending Climate Change Litigation, up to the maximum amount of GBP [X] per claim (the “Indemnification Sum”).

The Insurer[s] may at any time pay to the Insured the full Indemnification Sum in connection with any claim arising from a Pending Climate Change Litigation, at which point the Insurer shall have no further liability in connection with such claim.

The Indemnification Sum shall be:

(a) subject to the Insured [and/or Additional Insureds] providing the Insurer[s] with a full and final discharge and release, including from any continued or future involvement in the Pending Climate Change Litigation [or any claim or matter arising out of or in any way connected or related to the Pending Climate Change Litigation], upon payment;

(b) subject to a deductible of GBP [x] per claim;

(c) in addition to the overall [Limit of Indemnity] under the Policy; and

(d) inclusive of any defence costs and expenses, claimants’ costs and expenses and any other damages, costs, expenses or similar that become payable by the Insured [and/or Additional Insureds] to the Claimants and/or any Third Party in relation to the Pending Climate Change Litigation [or any claim or matter arising out of or in any way connected or related to the Pending Climate Change Litigation].

Other Insurance

In addition to the General Conditions listed in this Policy, if a Pending Climate Change Litigation is covered under another insurance policy, this Extension shall apply in excess of any other valid and applicable insurance policy held by the Insured [and/or Additional Insureds].

Conditions Applicable To This Extension

This Extension is subject to the following conditions:

1) The Additional Premium must be paid within [x] days of Policy Inception;

2) The Insured [and/or Additional Insureds] fully discloses its contemporaneous assessment of its exposure to litigation arising from Climate Change or a Climate Change Event, and the measures being taken to mitigate the risks of litigation arising from Climate Change or a Climate Change Event, within [x] days of Policy Inception;

3) The Insured [and/or Additional Insureds] fully discloses the Net Zero Target(s) and Net Zero Target Plan(s) applicable to all their businesses within [x] days of Policy Inception; [and]

[4) The Insured shall report [annually] on progress towards achieving its Net Zero Target within [x] days of [x].]

5) The Insured shall: [Insert net zero-related organisational requirements from Sebastian’s Clause and other TCLP’s published climate clauses as appropriate. Given that the insurer may have the right to avoid liability in the event that a condition to cover is not satisfied, each of these should be carefully considered and there should be a specified timeframe for compliance. Consider linking the value of the insured limit available / applicable deductible / premium payable or policy renewals to the obligations and targets.]

[6) The Insured [and/or Additional Insureds] shall provide the Insurer[s] with all requested documentation to verify the existence of Pending Climate Change Litigation within [x] days of Policy Inception. Such documentation shall include, but is not restricted to, the formal court pleadings and pre-action correspondence.] [Drafting note: Delete if this is already a separate requirement of underwriters before cover incepts.]

This cover overrides incompatible General Conditions of Policy.

Schedule [x]: Pending Climate Change Litigation