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Govt to mandate liability insurance for companies that deal with hazardous materials

Companies that deal with hazardous materials are expected to be required to buy liability insurance from January of 2012, state secretary for environmental protection Zoltán Illés said at a press conference on Friday in Kolontár, the site of Hungary's worst ever industrial disaster.

Hungary's environmental authority is expected to make liability insurance a requirement for issuing permits to such companies, Illés said. Parliament could vote on making the insurance a legal requirement in the autumn session, he added.

There are about 1,600 companies in Hungary that deal with hazardous materials, Illés said. The increased cost of mandatory liability insurance would reduce the number, making oversight of their activities easier, he added.

Kolontár was flooded with toxic red sludge last October after a reservoir and a nearby alumina plant burst. The flood killed ten people and damaged hundreds of homes. Almost all of the money for the cleanup and reconstruction has come from the state and donations.

Illés said it was "unacceptable" that MAL, the company that owns the reservoir that burst, was covered for just HUF 10 million in damages.