Independent contractors may need pollution liability insurance, especially if they’re working on jobs with environmental exposures such as asbestos abatement, mold removal, or stripping lead paint. This insurance is often necessary in addition to general liability to protect contractors against liability from damage – including injury or illness, property damage, contamination cleanup costs – caused by environmentally hazardous materials. Pollution liability may also be a wise investment for other clients, including those in the construction industry, to protect them from pollution incidents arising out of their operations.
Incidents of pollution would not be covered under your clients’ general liability policies. Companies with possible pollution exposure need pollution coverage in addition to general liability. There are three components to environmental coverage:
- General Liability (GL)
- Contractors’ Pollution Liability (CPL)
- Professional Liability (PL)
Contractors’ Pollution Liability covers bodily injury or property damage when a pollution condition occurs, such as when a contractor tears down a building filled with lead paint, or a company conducts asbestos remediation. This type of insurance coverage is necessary for remediation contractors who get rid of pollutants (e.g., lead, asbestos, mold). It can also be helpful for other clients, such as a carpenter who might be removing wood trim containing lead paint.
A blended policy combines General Liability (GL), Contractors’ Pollution Liability (CPL), and Professional Liability (PL), so there are no gray areas or gaps in coverage. It can be a great option for clients with environmental exposure. Quaker has relationships with carriers that offer this option, providing all three coverages on one policy.
Clients that may have environmental exposure may also want to consider additional coverages, including:
- Transportation Pollution Liability. If your client is transporting a pollutant and it’s released during transport, this policy will cover the incident and the costs to clean up the spill. If your client ripped down a building that contained asbestos and they’re transporting the contaminated materials in a dump truck, which overturns and scatters the materials, the client is covered.
- Non-Owned Disposal Site Coverage. This covers the dumping of materials at sites your client doesn’t own. If a demolition contractor takes debris offsite and the materials are contaminated, this policy covers the cleanup.
- Site-Specific Pollution Policy (also known as Environmental Impairment Policy). This is a good option if your client manufactures or stores a product that could be a pollutant. Say a dry cleaner uses toxic chemicals, the chemicals get into the ground, and the nearby area is contaminated. This policy covers the cleanup at their site, as well as the nearby areas impacted.
Whether you represent a solar contractor who could expose mold when installing solar panels on a roof, or your client produces a product that could release oil into the ocean if it fails, you should know precisely what types of coverage will protect them in these incidents.
Talk to a retail agent that’s well-versed in environmental insurance and conduct a thorough risk assessment. Does your client use toxins that could be released into the environment? Are they involved in hazards daily? Are they transporting – or disposing of – potentially hazardous waste? Answers to these questions will determine the types of policies they need.
Quaker Special Risk has extensive environmental insurance experience and can answer your questions about these types of policies, as well as things to consider when determining environmental risk. Contact us for more information, tips, and advice.