Pollution Liability Insurance

Contractors Pollution Liability Addresses Environmental Risks on the Job

Contractors face a lot of risks on job sites, including those stemming from pollution liability exposures. This comes with the territory and shouldn’t be taken likely. Just as one protects its business in the event of a crew member getting hurt on the job or a property being damaged from fire while under construction, environmental risks are as real and critical to an operation’s viability and require protection.  Some of the pollution exposures contractors face include contaminated soil disposal and the accidental release of fuel oil, chemicals and toxic gases from broken pipelines, utilities, and stationary and mobile fuel tanks. For these reasons and more, Contractors Pollution Liability insurance is a must-have component for the construction industry.

Just take a look at a couple of actual claims cited by a major insurers, underscoring the need for insurance coverage: A contractor responsible for fueling airplanes at a major airport had its hose rupture causing a 5,000-gallon jet fuel spill that blanketed the ground. With Contractors Pollution Liability policy, the cost of remediation is covered, avoiding a devastating loss for the contractor. In another case, a paving contractor sprayed an oil-based binding layer on crushed aggregate, and planned to complete the asphalt roadway the following day. A heavy overnight rain caused the binding layer to run off into the groundwater supply, contaminating residential wells. Contractors Pollution Liability insurance provides coverage for the property damage and cleanup costs.

What’s more, contractors also face the potential for loss when performing certain type of work, such as Renovation, Repair and Painting RRP) jobs. Under the Environmental Protection Agency’s (EPA) RRP rule, effective April 2010, contractors that perform these types of projects that disturb the lead-based paint in residential properties (including multi-family properties), child care facilities, and schools built before 1978 must be certified and follow specific work practices to prevent lead contamination. For instance, for work performed on pre-1978 buildings, painting contractors must sample the paint to determine whether lead is present, and employ adequate measures. Moreover, the RRP rule affects almost anyone involved in renovation industry – including builders, contractors, carpenters, drywallers, plumbers, electricians, and those who do windows, siding, roofing, HVAC, and more.  Contractors Liability insurance coverage will respond in the event of a bodily injury, property damage, and cleanup costs stemming from operations performed by the contractor or operations performed on the contractor’s behalf.

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Chemical Spills and the Importance of Pollution Liability Insurance

When you think of chemical spills and the potential for pollution exposures, energy companies manufacturers and processing plants may be what comes to mind. But in addition to these industries, there are all types of companies that have pollution exposures, including commercial property owners, healthcare (think hospitals), general and underground contractors, disposal and recycling facilities, municipalities, amusing parks, retailers, and really any business with aboveground or underground storage tanks.
For example, dry cleaners that use or have used the solvent Perchloroethylene (PERC) have a significant pollution exposure. This chemical if leaked can contaminate our water, seep into our soil and affect the air we breathe. What’s more, it’s not just whether an existing operation is at risk from the toxins it uses in its current operation. A pollution exposure can result from prior use of land. You have instances, for example, where a prime retail location was once the former site of a gas station and the soil could be contaminated by gasoline.


Construction and development sites also have pollution exposures, with storm-water runoff as one of the most significant environmental concerns. Water contamination from runoff is a big problem, as it can contain diesel and oil, paint, solvents, cleaners and other harmful chemicals, along with construction debris and dirt. Other construction-related pollution exposures include the use of hazardous materials, and breaching unknown tanks or pipes when digging foundations and utility corridors.


Municipalities have a number of significant environmental exposures, too, including from their landfills, including air and water pollution. Air pollution can result from the more than ten toxic gases released from landfills. The most serious is methane gas, which is naturally produced during the process of decay of organic matter. As methane gas forms, it builds up pressure and begins to move through the soil. In fact, a recent study of 288 landfills, 83% of the sites were found to have off-site migration of gases, including methane. Groundwater pollution arises from leachates, which is the liquid that drains or “leaches” from a landfill. The problem with landfill leachates is leakage of a large number of toxins into fresh water waterways, which can end up in our drinking water up or water for everyday use. As landfills often are located in and near large bodies of fresh water or in swamps, the pollution can go undetected. The compounds submerge to the ground, to the groundwater, and then make their into the water we drink.


In addition to taking the precautions necessary to prevent chemical spills and leaks in accordance with Environmental Protection Agency (EPA) rules and regulations and the various acts that have been passed and updated throughout the years, having a robust Pollution Liability insurance program in place is critical. There are various types of policies available depending on the business and the exposures it faces. Environmental insurance specialists and insurers put together specific programs to address these exposures in the event of an accident.

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