Helping insureds understand why environmental Is an essential part of their coverage needs
By Amanda Duncan, President, PartnerOne Environmental
Pollution Insurance. As a carrier, broker, or agent our job is to sell the product to an insured. We all know the insured has an exposure and the coverage will be a benefit to them, but let’s face it, the insured is about as excited to spend money on a pollution policy as they are about a root canal. We can all relate; when we make big purchases, we prefer to have something to show for it. It’s hard to be fired up over an insurance policy; these days you don’t even get a paper copy! However, everyone wants to protect their most important possessions and for an insured, one would assume their business would be a top priority. The following are some highlights that may make spending money on a pollution policy more attractive to an insured. Or at least help them appreciate WHY it makes sense.
Defense Costs. Most standard General Liability and Property policies exclude claims arising from “pollutants.” That means if a third party brings a pollution claim against the insured, their current GL and/or Property policies WILL NOT defend them and the insured will have to pay for defense out of pocket. When we think of “pollutants” we all envision smokestacks, chemicals, oily water, and mold. But did you know that even milk can be considered a pollutant? What about silt/sediment? Pollutants are not always inherently hazardous in nature, but can cause pollution conditions that must be cleaned up.
Completed Operations. For a contractor, a pollution exposure is going to arise from their services/operations being performed for others. However, the exposure doesn’t end once the insured wraps up his time at the jobsite. Does water usually leak instantly during the course of work or is the damage usually discovered months later? What happens when a recently paved parking lot is damaged by a strong storm, washing paving materials into a nearby stream and killing fish and wildlife? Contractors must consider ongoing and completed operations pollution exposures. In the blink of an eye, a jobsite can evolve into a pollution claim.
Onsite Cleanup. It happens all the time: you turn on the news and see some type of industrial facility on fire. Or you see fire trucks and hazmat units on the scene of a chemical spill at a manufacturing plant. As the owner of one of these facilities, there are generally offsite issues to deal with, but what about the mess left onsite? Cleaning up a contaminated facility can cost millions of dollars. Does an insured have money set aside to handle a clean-up scenario?
Enhancements. If an insured was using their money to buy a new car, they would want as many extras included as possible! They should want the same for their pollution insurance. Many enhancements are readily available: Transportation Pollution Liability, Non-Owned Disposal Site Coverage, Mold Coverage, Legionella, Crisis Management, Emergency Response Costs…just to name a few. An insured should know that when buying a pollution policy, they can get a lot of bang for their buck!
So while purchasing a pollution policy may not be the most thrilling way for an insured to spend money, it’s surely is a very prudent way to protect a business from a possible environmental loss. Sell your client on peace of mind and smart risk management.