When you think of pollution exposures, what comes to mind? A toxic waste dump? People in hazmat suits and gas masks? There is a common misconception in our industry about pollution exposures. “If my client doesn’t deal with hazardous materials, then he or she doesn’t have an exposure.” Yes — anyone handling radioactive, explosive, toxic, or biohazardous material certainly has an exposure. But in reality, ALL contractors have an exposure to pollution.
CGL policies exclude most claims arising from a “pollution condition.” A pollution condition is generally a release of pollutants. According to many CGL policies, a pollutant is any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Based on this, any substance that meets this definition is a pollutant. Can your client’s operations cause any of these things to happen? If the answer is yes, then there is a pollution exposure.
Here are some of the environmental coverages that non-environmental contractors should consider:
Contractors Pollution Liability
Contractors Pollution Liability insurance (CPL) is coverage designed to protect from third party claims for damages caused by “Pollution Conditions” arising from the insured’s covered operations. Adding Mold coverage broadens the defined list of covered pollutants to include molds, funguses, etc.
Product information sheet (PDF)
Contractors Pollution Liability/Professional
The Contractors Pollution Liability/Professional Policy is a combined Pollution and Professional coverage form. It provides coverage to general contractors, construction managers, and various trade contractors who could potentially have both pollution and professional claims; CPL/Professional provides coverage for E&O exposures for contractors.
Product information sheet (PDF)
Specific exposures that non-environmental contractors may have:
- Disturbing or exacerbating existing pollutants: Many contractors move earth, excavate, demolish, or otherwise alter existing features of a property. If any of those contain hazardous substances (petroleum contaminated soil, asbestos containing building materials, etc.), the contractor can be held responsible even though he was never advised that he would be.
- Contamination caused by materials the contractor brings to the site, such as paints, cleaning solvents, fuels, lubricants, etc.
- Contamination caused by operations, such as cutting through a gas line, installing flashing around window incorrectly, installing piping improperly, failing to solder joints, roofing leaks, erosion at site causing offsite contamination, etc.
- Contamination for which the contractor is held responsible, such as operations of a subcontractor to the trade contractor and actions of a party delivering materials to the site for the contractor.
- In addition to job site exposures, non-environmental contractors also have exposures at the premises they own. This property, where they store their equipment and supplies, is often the single largest equity investment they have. Pollution at that location could reduce its value tremendously, effectively wiping out the equity built up by the owners.
- The final exposure area to note is Over the Road Pollution. This is the exposure that vehicles have going from owned premises to job sites. The upset and overturn of a vehicle can cause significant contamination, even if only from small amounts of fuels or solvents they use in their everyday work.
Again, the exposures described above are usually excluded from General Liability policies, so it is important for all contractors to have the right coverage that will protect them from potential claims and help secure the future of their businesses.