Pollution liability insurance is a type of insurance that protects companies against claims related to environmental damage caused by their activities. This can include damage caused by pollution, chemical spills, toxic emissions and hazardous waste.

If such a claim is made against an insured company, the insurance covers the legal costs and compensation for which the company is held liable under the law. This coverage is often required by commercial contracts, and can help protect companies against the significant financial costs that can arise from environmental liability lawsuits.