Creating a Limited Liability System for Losses Due to Hazardous Waste

Joan T. Schmidt and Dan R. Anderson

Journal of Insurance Issues, 1987, vol. 10, issue 2, 16-34

Abstract: Modern technology clearly produces many benefits to society. These benefits, however, are not achieved without cost. One extraordinary cost is the effect on environment and public health caused by industrial hazardous waste. … Federal and state governments have taken steps to control against such future pollution dangers. Regulation of the end cycles of industrial operations is provided for in the Resource Conservation and Recovery Act (RCRA) and the Comprehensive Environmental Responses, Compensation, and Liability Act (CERCLA). … Recently, shortcomings of RCRA and CERCLA have become evident because the insurance mechanisms upon which they heavily rely have been unable to fulfill the intent of the legislators who fashioned the law. In responses to this failure of the insurance market to meet current needs, a number of alternatives have been proposed. Among the proposals is the suggested development of a limited liability system similar to that existing for nuclear energy utilities in the Price-Anderson Act. The purpose of this article is to identify some of the problems unresolved by existing hazardous waste legislation and to consider whether a system of limited liability as set forth under the Price Anderson Act would be a viable alternative in addressing any of those problems.

Date: 1987
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