The European community is coming to grips with theimplementation of environmental regulations that U.S. businessesand their insurers have had to deal with for over 20 years, openingup new growth opportunities for the sale of pollution liabilitycoverage, market experts say.

The European Union directives, explained Romy Comiter, aconsultant for SMART Business Advisory and Consulting in London,aim to make polluters responsible for the cleanup ofproperties--something that has been commonplace in the UnitedStates for more than two decades.

For the EU, however, "it will change how people do business,"said Ms. Comiter.

The directives lay out the framework for individual nations tocreate remediation programs for polluted properties, but it will beup to the individual nation members of the EU to craft specificlegislation, she explained. That can translate into somethingsimilar to the situation in the United States, where in addition tofederal rules, environmental regulations vary among the states, sheand others observed.

For instance, Ms. Comiter noted that in Hungary, regulationswill extend responsibility for remediation to directors, officersand shareholders, bringing the threshold to a higher level thanthat laid down by the U.S. Environmental Protection Agencytoday.

To answer demands that the new regulations will bring, what shesees happening is a more creative environment to develop answersand incorporate lessons from experiences in the United States."This will force companies in Europe to increase their level ofprevention and build it into their risk management programs," shesaid.

The new regulations also open up a new and growing market forthe insurance community, she predicted.

"As various member countries determine what will be implemented,it will be a huge opportunity for the environmental marketplace,"said Kim Weber, vice president of market management at Zurichcommercial markets, environmental. She said this is an area wherethe Switzerland-based insurer plans to "play a major role."

For global corporations, she pointed out, it will mean thinkingabout a new layer of risk management and risk transfer within theindividual EU nations. She added that it will also mean Zurich willneed to inform clients on new buying insurance decisions they willhave to make going forward.

"There will be a learning curve for distribution and educationof customers on what they need to think about," she said.

As far as timing goes, she said some nations have been a littleslow at developing and implementing the EU directives, but she saidimplementation is coming, and it will be the responsibility ofinsurers and brokers to enlighten customers so they can make theright coverage decisions.

For insurers, according to Juerg Busenhart, vice president andsenior product manager for Swiss Re, one major challenge will beputting together the statistical information to do the properunderwriting, as well as develop the claim management expertise tocope with this new liability.

One major difference between U.S. environmental-pollutioncoverage and the situation in Europe is the responsibility goingforward, experts noted. Where the United States dealt withretroactive responsibility, the EU directives deal with the risk ona claims-made basis.

"The main problem with this legislation is that it is theobligation of the polluter to do this remediation. It is notcompensation in terms of money," but rather steps the polluter hasto take to perform the remediation, said Mr. Busenhart.

"He has to restore the damaged environment," Mr. Busenhartexplained. "That will be the challenge for liability insurers inEurope or anyone else in the world, because they are use tocompensating damage in terms of money."