Although the General Environmental Law instructs the Ministry of Environment and Natural Resources, together with the Ministry of Economy, to issue the necessary provisions to establish mandatory civil liability insurance to cover damages to the environment and natural resources caused by accidents, environmental risk insurance is still pending development in the Dominican Republic. Furthermore, General Insurance Law No. 146-02 does not specifically provide for environmental risk insurance.
However, the General Environmental Law establishes the obligation to obtain a compliance bond for all companies or individuals responsible for activities requiring an environmental permit or license. The purpose of this bond is to ensure compliance with the provisions of the environmental authorization and to guarantee the implementation of the environmental management plan approved by the environmental authorities for the operation. The amount of the bond is equivalent to 10% of the total cost of the physical works or investments required to comply with the environmental management plan.
Regardless of the current legislation, insurance companies have not yet created, under the designation of “Environmental Risk Insurance,” coverage for all contingencies related to environmental impacts. It is possible to obtain a variety of insurance policies that provide companies with a partial solution to these requirements, including: (i) General Liability Insurance; and (ii) Industrial Risk Liability Insurance. In particular, the terms and conditions of the latter must be agreed upon with the insurer on a case-by-case basis.
