3rd party insurance, beyond vehicles


Photo by Dawid Zawiła on Unsplash


Earlier tonight I had an inspiring conversation (about round 4 now, I think!) with Nell, a lovely lady in Northern Ireland. We were discussing what to do about externalities, or as she has been calling them, “shifted costs”.

Every action we take in the world has consequences, good and bad, foreseeable and unforeseeable … for ourselves, for others, for our environment. We handle these in a variety of different ways, sometimes trying to prevent them, sometimes apportioning responsibility and costs before or after the fact, sometimes just putting a plan in place (often called insurance) to handle them if and when they occur.

One example of that last approach, in Australia and apparently in Northern Ireland, is 3rd party insurance, which is compulsorily set up at the point of registering a vehicle. This insurance is intended to cover possible direct injuries to bystanders (pedestrians etc) that may occur during use of the vehicle.

And we were thinking … maybe a similar kind of approach should be used in conducting business – not public liability insurance, which is based on ‘fault’, but rather, a broad 3rd party insurance which is simply intended to cover the external consequences of business activities, up until the point where the costs can be covered in some other way (e.g. by contractual agreement with external parties).

Thoughts?

Well, attempts have been made to provide for comprehensive cleanup, e.g. https://en.wikipedia.org/wiki/Superfund however, unfortunately, this is often ‘ambulance at the bottom of the cliff’ stuff, and easily repealed (as Trump is doing, and Australa’s governments are trying to do by removing environmental regulations). Australia has over 60k unrehabilitated mine sites… and, in a neoliberal man-is-above-nature mindset and ideology, those doing the damage generally move on before paying tax, let alone compensation for ‘externalised costs’ - in other words, we capitalise the private profits and socialise the ‘external’ costs, that affect us all.

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Hi Neil - wonderful to see you here! Welcome :purple_heart:

Have I interpreted correctly that the Superfund you referred to is focused on environmental cleanup only, and not looking at compensating people who have been affected, e.g. in terms of health and/or reduced quality of life?