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Pollution liability insurance is known as "pollution incidents" and it insures in two ways: one is when the pollution takes place on the insured property; the other is when the insured suffers losses resulting from pollution on another property. In such cases, it is the insurer's responsibility to recover costs from the party that caused the incident.

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Pollution liability insurance is doubtless a useful and an economically viable way of managing environmental risks. It can be particularly beneficial to those companies that deal with materials that may be considered as pollutants once released into the environment.

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