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| Contamination Happens: Is Your Company Covered? |
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Even when contractors are doing everything possible to prevent risks, property contamination can happen.
That’s bad news. But the news can become worse when contractors assume their general liability (GL) policies cover all manner of exposures.
In fact, most GL policies have "environmental and pollution” limitations and/or complete exclusions that make contractors financially responsible for on site pollutants. Contamination from hazardous materials -- such as lead, mold, asbestos and silica -- and exposure to bacteria, fungi and mold might be covered on a limited basis or not at all.
The truth is that general liability coverage, a business necessity Fenimore also offers, is not intended to cover industry-specific risk. That’s why contractors are better protected with coverage specific to the risks they face.
Any contractor involved in construction projects or remediation needs contractor’s environmental liability coverage.
Even cleaning companies can also be held liable if they use products that can compromise indoor air quality, including cleaning or pleasant smelling sprays. While obtaining proof of insurance from the manufacturer or using environmentally friendly products can significantly reduce liability, courts continually introduce ways to involve third parties, making coverage essential.
There are three specific types of coverage essential to contractors. They are: Contractors Pollution Liability (CPL), Remediation Cost Cap Insurance and Professional Liability coverage.
Contractor’s Pollution Liability (CPL)insurance helps protect contractors from a wide range of environmental risks associated with construction and ongoing job site operations. Generally, CPL pays for third-party claims of bodily injury, property damage, cleanup, business interruption expenses and other exposures.
Such exposures can come from a wide range of environmental risks associated with construction and ongoing job site operations. These include, but are not limited to, transporting debris, dirt and materials that may be contaminated and end up at a transfer station, landfill or any other non-owned disposal location.
Remediation Cost Cap Insurance, also known as Cleanup Cost Cap/Remediation Stop-Loss coverage, provides cost-overrun (or excess) coverage a financial back up when cleanup jobs exceed $2 million. From finding new contamination during a cleanup to exposures arising from design negligence, this vital insurance also covers cost overruns for known significant contamination expenses.
Professional Liability coverage for contractors pays for claims, including pollution coverage, related to their negligent acts, errors or omissions. These can occur as a result of “professional” error/negligence and oversight causing pollution and environmental accidents that have an “economic” impact on an active project.
This policy may also be purchased to protect against contingent bodily injury and or property damages resulting from pollution or an environmental accident resulting from a “professional liability“ accident, error or omission. PL coverage can be purchased separately or packaged with other insurance, including general liability coverage.
Contractors can purchase coverage against pollution risks, including off-site transportation and exposures at non-owned locations. Insurance can be obtained for multiple years, for completed operations and on a per-project or multiple site occurrence basis. |
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| Who Needs It? Contractors who need this critical coverage include: |
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- Remediation contractors – including those involved with site testing, disposal and transportation of materials including lead, mold, asbestos and silica.
- Specialty contractors – restoration, foundation, pipeline, tank installation and drilling
- Trade contractors – HVAC, paving, carpentry and concrete
- Disposal and transportation companies
- Environmental consultants
- Cleaning service companies - including carpet, and
- General contractors for commercial, residential, municipal, highway/road, infrastructure, maintenance, mechanical, demolition, industrial, excavation, grading, etc.
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