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Contractors Environmental Liability: Is Your Company at Risk?
Contamination Happens: Is Your Company Covered?
Types of Pollution and Environmental Liability
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Contractors Environmental Liability: Is Your Company At Risk?
Every year, contractors pay hundreds of millions of dollars due to liability losses from various environmental, hazardous and pollution accidents. These can include accidental property contamination, air pollution and non-owned disposable sites, as well as third party bodily injury and property damage. Some of these businesses never financially recover because they lack proper insurance coverage. While contractors should always ensure their clients, whether real estate owners, operators or developers, have appropriate Real Estate Environmental Coverage, they still need Contractors Environmental Liability coverage.
What makes contractors legally liable for environmental pollution?
The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), also known as Superfund, makes “potentially responsible parties” liable for releasing hazardous substances. To make matters more complicated, states have their own laws as well.

Put simply, contractors who play any role during the construction, remediation and/or cleaning process can become “responsible parties” when property contamination occurs.

Effectively mitigating risks from pollution and environmental contamination requires more than a comprehensive environmental risk management plan, specific contractual language, financing strategy and even general liability and property coverage.

These risks include:
  • releasing contaminants -- such as volatile organics, broken pipelines, fuel spills and toxic gases -- when disturbing land, renovating a building or cleaning with potentially toxic chemicals during remediation, transportation away from the site or indoor cleaning that can result in third party bodily injury, property damage and/or additional site cleanup.

  • Being found responsible for damage to natural resources or

  • Using or storing significant quantities of hazardous chemicals that could have major environmental liabilities including dry cleaners, gas stations, car repair facilities, factories and home repair and home cleaning companies.

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