In November 2025, a UK High Court judgment declared BHP liable under Brazilian law for the catastrophic failure of the Fundão tailings dam, has significant implications for mining and environmental liability coverage.
Following a 50-day hearing, the lengthy judgment found that the decision to continue raising the dam wall when it was unsafe was the “direct and immediate cause” of the 2015 collapse.
The court applied Brazilian environmental law to the London-based parent company which had an indirect role in the Brazilian facility’s operations. It rejected arguments that responsibility ended with the immediate operating company. BHP had argued that the English proceedings duplicated Brazilian actions and were unnecessary.
Insurers and reinsurers should review their historic and future underwriting of high-hazard tailings dams, considering issues such as dam design, stability reviews, emergency response planning, and associated risks. Insurance coverage should at least consider the English High Court’s willingness to look beyond the immediate operator to the ultimate economic beneficiaries of hazardous activities, as well as the trend of class actions or mass claimant groups litigating in jurisdictions with potential for more robust redress. Mining insurance programmes should consider appropriate deductibles, sub-limits for tailings-related losses, pollution exclusions, and suitable aggregation clause wordings.
Underwriting for systemic failures in tailings management and catastrophic mining losses should be thoughtfully and carefully reviewed.
All of this requires close consideration where there is an increased risk of parent-level exposure for multinational mining and resource groups whose risk transfer arrangements are structured around operating-company liabilities.