Climate change litigation could include claims for environmental damage, pollution or liabilities arising from the impact of extreme weather events or rising sea levels, which are becoming more prevalent as a result of global climate change. The JLC monitors developments and discusses how underwriters may need to adapt their policies to account for the changing risk landscape brought about by climate change.

This issue involves liaising with the International Oil Pollution Compensation Fund (IOPC) to ensure that the shipowner has valid proof of insurance (via the Blue Card) to meet the relevant obligations. This facilitates the process of compensation from the IOPC fund if a significant incident occurs, ensuring that those affected by the incident can receive compensation even if the shipowner’s insurance is insufficient.

Legal developments, particularly in the US, continue to reshape this class of business by expanding liability exposure through broader pollution and personal injury interpretations, encouraging more frequent and costly litigation, forcing insurers to adjust policy language, pricing and coverage, and creating demand for innovative coverage related to climate, ESG and regulatory risks.