The European community is coming to grips with the implementation of environmental regulations that U.S. businesses and their insurers have had to deal with for over 20 years, opening up new growth opportunities for the sale of pollution liability coverage, market experts say.

The European Union directives, explained Romy Comiter, a consultant for SMART Business Advisory and Consulting in London, aim to make polluters responsible for the cleanup of properties--something that has been commonplace in the United States 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 to create remediation programs for polluted properties, but it will be up to the individual nation members of the EU to craft specific legislation, she explained. That can translate into something similar to the situation in the United States, where in addition to federal rules, environmental regulations vary among the states, she and others observed.

For instance, Ms. Comiter noted that in Hungary, regulations will extend responsibility for remediation to directors, officers and shareholders, bringing the threshold to a higher level than that laid down by the U.S. Environmental Protection Agency today.

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

The new regulations also open up a new and growing market for the 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 Zurich commercial markets, environmental. She said this is an area where the Switzerland-based insurer plans to "play a major role."

For global corporations, she pointed out, it will mean thinking about a new layer of risk management and risk transfer within the individual EU nations. She added that it will also mean Zurich will need to inform clients on new buying insurance decisions they will have to make going forward.

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

As far as timing goes, she said some nations have been a little slow at developing and implementing the EU directives, but she said implementation is coming, and it will be the responsibility of insurers and brokers to enlighten customers so they can make the right coverage decisions.

For insurers, according to Juerg Busenhart, vice president and senior product manager for Swiss Re, one major challenge will be putting together the statistical information to do the proper underwriting, as well as develop the claim management expertise to cope with this new liability.

One major difference between U.S. environmental-pollution coverage and the situation in Europe is the responsibility going forward, experts noted. Where the United States dealt with retroactive responsibility, the EU directives deal with the risk on a claims-made basis.

"The main problem with this legislation is that it is the obligation of the polluter to do this remediation. It is not compensation in terms of money," but rather steps the polluter has to take to perform the remediation, said Mr. Busenhart.

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