Are your clients in the construction industry protected against pollution-related claims?

We don’t always think of construction as having a risk of environmental hazards, yet there are many aspects of the industry that can cause a pollution release:

• Air pollution–dust, emissions from vehicles or equipment, or exposure to toxic substances such as asbestos in old buildings or mold/microbial growth due to moisture.
• Silt/sedimentation from runoff of poorly contained active constructions sites.
• Soil contamination–spills of oil, chemicals, or other hazardous chemicals can contaminate surrounding soil.
• Water contamination–chemicals or oil can compromise nearby water sources, affecting both the natural ecosystem and potentially drinking water.
• Disposal–construction waste that is discarded or handled improperly may create a pollution problem.
• The use of heavy equipment in the construction industry may damage storage tanks, pipes, lines, etc. (both above and below ground), resulting in a pollution release.

These events may cause the contractor to face pollution liability that results in costs, fines from regulatory bodies, cleanup costs, and reputational damage.

Watch out for limitations

Standard Commercial General Liability (CGL) insurance policies typically exclude pollution-related claims. In fact, many policies will now include an “absolute pollution exclusion” that ensures no payouts will be made for pollution-related incidents.

Filling the gaps in pollution insurance coverage

Insureds in the construction industry can gain protection for pollution-related events through Contractors Pollution Liability (CPL) insurance. This specialized pollution insurance coverage is designed to cover insureds from the pollution-related exposures that are routinely excluded from standard policies.

CPL insurance often includes coverages for:

• Environmental cleanup costs for sites contaminated by pollution.
• Mold- and microbial-related issues.
• Third-party bodily injury and property damage costs.
• Costs for legal defense.
• Completed operations coverage (which protects if there’s environmental pollution after the construction company has completed work).

Contractors need to address professional exposures, too.

Pollution exposures are not the only concern for contractors — contractors often have exposures for professional liability, either from operations they perform or those performed by entities working on their behalf. Examples can include construction management, subcontracted design work, testing for contaminants, or monitoring environmental conditions. Contractors may perform operations themselves that expose them to professional claims, including job site modifications, selection and supervision of subs, adhering to local codes and ordinances, etc. Contractors may also be brought into claims arising from subcontracted design, construction management, and project delivery methods.

Having Contractors Pollution & Professional Liability is an important step in safeguarding construction businesses from pollution-related incidents. Want to explore Contractors Pollution & Professional Liability options? Visit our product page for more information or connect with us.