See the introduction of the Essay in the preview. Here is the conclusion part...With the potential of private environmental insurance to expand to bigger proportion, it is important to note how environmental insurance can best work when combined with other instruments to encourage all firms to adopt socially efficient risk reduction (Risk Anal., 2013). Considering third party audits like the once required by ISO certification should also be used by government regulatory commission as well as insurance companies to adjust their premiums. Otherwise, I can conclude confidently that environmental insurance has done well where other traditional methods have failed in reducing environmental risk by being able to provide compensation for injured parties hence enabling small firms not becoming bankrupt. Insurance firms are also able to provide incentives for firms to adopt socially efficient risk reduction methods.  [Show Less]