Pollution Exclusion: To secure Environmental Coverage that truly covers your clients, look to the experts for guidance
By NIP Specialty Brokerage
It seems that all contractors have environmental exposure these days, but pollution coverage is still difficult to come by. Many standard commercial general liability policies include a pollution exclusion that leaves contractors scrambling when a pollution event occurs at their jobsite.
Contractors frequently have pollution exposure from performance of regular building activities. If a construction project involves first demolishing and removing an existing structure, there is the issue of handling and disposing of dangerous existing materials, including lead paint, asbestos, fluorescent lighting and more.
Beyond demolition, the potential environmental exposures are numerous on any construction job, including:
- Improper installation or disposal of underground storage tanks
- Failure to properly locate pipelines and utilities
- Failure to identify possible contamination on site
- Release of fumes from building materials, paints, etc.
- Improper use or spills/leaks of chemicals like sealants, solvents, adhesives, corrosives, etc.
- Incorrect handling and/or storage of chemicals
- Improper waste management and disposal
Many Sources of Contaminants
Sometimes the environmental dangers come from unexpected places. A recent Science News magazine article reported that at least 20 states have natural deposits of asbestos in the soil, and that these near-surface deposits of the mineral can be extremely dangerous because everyday activities (like sports and gardening) can stir particles and dust from these deposits into the air for locals to breathe. Imagine what a construction project could do.
Another environmental issue is the increase in lawsuits stemming from mold-related problems. When construction defects lead to water infiltration in a building, mold can result, severely damaging the building and making its inhabitants sick. While the property damage may or may not be covered, the personal injury suffered by a “sick” building’s inhabitants is often not covered by the contractor’s insurance due to the pollution exclusion.
While asbestos, lead and mold are the most notorious environmental contaminants, there are many more that are usually associated with construction sites: petroleum, lubricant oils from equipment, paint, solvents, adhesives, tar and asphalt, caustics, etc.
Steps Contractors Can Take
There are many precautions your clients can take to help minimize their pollution risk. Contractors are focusing on improving quality control, updating their procedures, and ensuring their team has the proper training and certification for better pollution prevention and for handling any hazardous materials. They are also:
- Making sure adequate safety and health measures are in place and being followed
- Posting safety checklists for proper handling and storage of chemicals
- Identifying and using appropriate air pollution controls
- Using personal protective equipment and clothing
- Implementing routine inspections of both the job site and the storage areas for chemicals and hazardous materials for any problems (or potential problems).
Diligent attention to pollution prevention is essential, but it’s still no guarantee that your clients won’t eventually face an expensive claim resulting from pollution at their worksite.
Getting Pollution Coverage
NIP Specialty Brokerage has had success placing a wide range of environmental insurance. A construction dedicated wholesaler, NIP Specialty partners with A rated admitted markets who can provide contractors with pollution coverage that most general liability programs specifically exclude, such as MOLD and EIFS.
A mono-line pollution policy or a combined pollution / CGL policy can provide protection for contractors against claims for third-party bodily injury, property damage or cleanup costs/environmental damages arising from pollution conditions caused in the performance of covered operations. The coverage applies to sudden and gradual pollution events and responds to cleanup costs, both on and off the work site. While the mono-line pollution policy is available to all contractors, the combined pollution/CGL policy is available to contractors that are involved in 60% or more environmental work.
NIP Specialty is targeting classes from the general (GCs and Builders) to the very environmentally specific (Environmental Abatement/Remediation Contractors, Site Restoration and Cleanup Contractors). With competitive pricing, limits up to $10 million, and hard-to-find coverage like Blanket Additional Insured and Blanket Waiver of Subrogation Endorsements, we are getting difficult risks placed regularly.
Having a construction expert working with you can be the key to success on environmental coverage. Give us a call on your next account and see what our expertise, diligence and creativity can do for you and your clients.
If you have an account we may be able to help you with, please submit it to us today:
- Via fax: 732-634-2904 or
- Via email: NIPSpecialty@NIPGroup.com
For more information about NIP Specialty Brokerage, call 1-800-446-7647 Ext. 515.
About NIP Specialty Brokerage
NIP Specialty Brokerage is a wholesale brokerage operation targeting non-standard commercial risks underwritten by admitted and non-admitted specialty carriers, with a focus on the Construction Industry. NIP Specialty Brokerage assists agents and brokers in the structure and placement of complex insurance risks throughout the United States by accessing NIP’s brokerage expertise and relationships with global insurance markets.