Clarifying Insurance for auditors of the
R2 Certification Standard

What does the standard say?

• Provision 11 General Principle states that a recycler must have insurance that is "adequate to cover potential risks and liabilities."

Issues with interpretation

• Who defines "adequate"
• How is this idea affected by the TPE?
• What operations require specialty cover?
• Who assesses the potential risks?

Requirement (a) reads that a recycler must have "adequate insurance...to cover liabilities including environmental pollution."

Back to the most basic insurance issue, which is the Total Pollution Exclusion or "TPE"

"Pollutants" include "waste" meaning:

• Items to be recycled
• Items to be recclaimed
• Items to be refurbished
• Items that have been recycled, reclaimed or refurbished

there will be no coverage

• For Bodily Injury or Property Damage from site based operations or from products that left the facility
• The TPE exists in various insurance policies, like E&O, Transportation, Excess liability (umbrella) and General Liability

The TPE
Effectively NEGATES cover
for the ewaste industry

R2 Guidance

Comment 11.1

• thorough risk assessment
• may be determined that pollution liability is not necessary

COMMENT 11.2

• what does CGL cover?
• what insurance is needed?
• problems with AI status
• dont verify language

Comment 11.3

• what does not admitted mean? It is absolutely regulated.
• lets define NODS
• transportation pollution
• Does it protect both up and down stream?

COMMENT 11.4

• Include products and completed operations if part of Contractors Pollution Liability (CPL)
• "indemnification obligations"
• bad example?

A few parting thoughts about closure and comment 11.5

To be Clear: The current Standard does NOT accept insurance as a means of financial assurance for closure.
BUT Stay Tuned...

COMMENT 11.5

• why outside of insurance?
• trust during BK
• bond backed by personal guarantee
• LOC impairs capital
• Assets in BK