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.

photo credit: Siebuhr cc