London - Chemicals suppliers and users in the European Union face insurance issues of they do not comply with the EU's Registration, Evaluation and Authorisation of Chemicals (REACH) regulation, according to major London-based insurance broker Marsh. REACH's pre-registration phase ended 1 Dec 2008.
Any company trading in the EU which either directly supplies chemicals into the EU, or has investments in the EU which manufactures chemicals or uses chemicals, has to comply with REACH, Marsh points out.
"The implications of non-compliance with REACH are very clear. If the pre-registration is not complied with then, effective 1 Jan 2009, the use of the chemical substance in the EU will not be permitted until such time as a registration details have been provided to ECHA and a registration number is obtained," said Christopher Bryce, Marsh's industry practice leader, for chemicals and life sciences in Europe, the Middle East and Africa, in a 5 Dec announcement.
Marsh claims that, of the more than 100 000 chemical substances commonly in use in the EU, "most ... have not had their properties evaluated and documented for safety." REACH is supposed to make the trading, handling and usage of chemicals safer for European workers and citizens and also to protect the environment.
"Non-compliance creates numerous risks and liabilities," continued Bryce, adding that, "an error or omission in complying with the pre-registration phase will result in the ban of use of the chemical substance in the EU." Such a ban on will interrupt the supply chain and cause financial losses, the Marsh executive said.
"It is vital that companies understand what their obligations are and ensure that they are compliant with REACH's deadlines," Bryce said.
Marsh offers strategies to deal with risks and liabilities for REACH:
* Insurance for manufacturers or importers can protect against loss of revenue;
* Chemicals suppliers can insure against legal liabilities in the event that their customers incur a loss of revenue as a result of their error or omission;
* Where either an only representative for a manufacturer from outside the EU, or third-party representative, performs tasks in complying with pre-registration, these two service providers can insure for their legal liability if they are proven to be negligent in such services.