Edited by Carlo Carraro and Vito Fragnelli
Chapter 7: Co-Insurance Games and Environmental Pollution Risk
Vito Fragnelli and Maria Erminia Marina 1. INTRODUCTION In this chapter we consider a situation in which a large risk has to be insured and in particular the case of environmental pollution risks that depend on ﬁrms that in their production processes may have as a side-eﬀect the release of polluting wastes that damage the environment. Firms may interact with the environment in diﬀerent ways; more precisely they can alter the basic environment, inﬂuence the possibility of using it if they damage public or private goods, compromise human health directly or indirectly, contaminate biological resources and ecosystems. The consequences may be described as damage to persons and/or materials or interruption of various activities (industrial, agricultural or recreational). We want to recall some environmental pollution risks according to a simple classiﬁcation: ● ● ● ● ● air pollution, generated by emissions, harmful gases, exhaust fumes, stenches, waste disposal, chemical production; water pollution, when factories discharge eﬄuents into rivers; soil pollution , deriving from rubbish, solid wastes, industrial wastes, for example from farms that use chemical manure or pesticides or from factories that dispose of their waste in the soil; marine pollution, where coastal ﬁrms get rid of waste and sewage into the sea or resulting from oil tanker accidents; acoustic pollution, due to high noise levels and vibrations with risk to workers and neighbouring inhabitants. In order to limit the costs related to environmental risk a ﬁrm generally eﬀects an insurance policy that covers both third-party liability for any damage that...
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