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  • Contractors Pollution / Professional

    Terms

    • Coverage: Professional (Claims-Made), and Pollution (Occurrence or Claims-Made)
    • Minimum Premium: $5,000 
    • Capacity: $50M (multiple carriers can be layered to provide higher limits) 
    • Appetite: virtually all construction related contracting work, including; Trade Contractors, Design/Build Contractors, Project/Construction Managers, General Contractors, Environmental Contractors, and more… 

    Professional Liability Coverages

    • Contractors Professional Liability: broad language covering negligent acts, errors or omissions 
    • Rectification / Mitigation: quickly correct professional errors to mitigate the overall size of a loss 
    • Protective / Indemnity Loss: negligent acts, errors, or omissions from subcontracted professionals 
    • Legal Defense 

    Pollution Liability Coverages

    • Contractors Pollution Liability
    • Transportation Pollution Liability 
    • Emergency Remediation Expense 
    • Non-Owned Disposal Site Liability 
    • Premise Pollution Liability (aka your operating location)
    • Mold, Asbestos, Natural Resource Damages, Silica, Lead, etc. 
    • Legal Defense 
    • Image Restoration 
    • Emergency Claim Support 

    Claim Scenarios

    Contractor’s Professional Liability 

    • A GC miss-read project site plans, and mistakenly extended the paving of a parking across the property line. A year later, the error was identified when the neighboring property was surveyed. Claim costs included the demo and restoration of the neighboring property, and re-design of the parking lot’s drainage system, totaling $750,000.  

    Contractor’s Professional Rectification / Mitigation Coverage 

    • Prior to completion of a new commercial building, the project GC discovered an error in the HVAC system, which allowed moisture build-ups at various points in the system. By identifying the mistake prior to completion, the cost to correct the error was significantly less than if it had gone undetected.

    Contractor’s Professional Indemnity / Protective 

    • A subcontractor used an incorrect pipe size for a new commercial fire-sprinkler system. The error was discovered post construction when the system failed to operate correctly. The Sub’s professional policy had inadequate limits to cover the $3M claim. Lucky for the GC, their Protective Indemnity endorsement responded to the balance.  

    Contractors Pollution Liability (Jobsite) 

    • A major thunderstorm destroyed the storm water runoff controls at a construction site, forcing sediment to flow down grade and into a nearby lake.  The GC was liable for the damages, which exceeded $2,000,000.  
    • A contractor ruptured an underground gas line, causing a high-pressure release. Due to safety concerns, local authorities evacuated a 2-block radius around the release, forcing nearby businesses to shut down temporarily. Costs for clean-up, 3rd party business interruption, and natural resource damages totaled over $1,000,000. 

    Transportation Pollution Liability (TPL) 

    • A truck crashed while transporting raw materials, releasing the contents into a nearby wetland. Costs for investigation, remediation, additional monitoring, and natural resource damages exceeded $250,000.  

    Premises Pollution Liability (Contractor Operating Facilities)

    • A contractor installed a 10,000-gallon diesel tank at their headquarters for fueling trucks / equipment. While loading equipment onto trucks, the crane operator hit the fuel tank, allowing thousands of gallons to spill into the surrounding soils, and onto a neighboring property. Total cost of the claim was roughly $350,000. 

    Legal Defense 

    • A former industrial building was redeveloped into new, mixed-use commercial space. 5-years after completion, a child who lived the building was diagnosed with lead poisoning. The child’s parents, along with several other residents, filed bodily injury lawsuits against the General Contractor who oversaw the project. In response, the GC’s Pollution-Professional policy organized and funded a robust defense team, including legal, environmental, and medical experts. The defense team proved no evidence of lead in the building and highlighted several items in the child’s past as the likely the cause of the poisoning. The suit was dropped. The GC was billed for a mere $10,000 deductible, while total defense costs exceeding $400,000. If not for the broadened pollution / professional policy, the suit could have been lost, and uncovered claims totaling in the millions. 

  • Pollution Exposures Impacting Contractor Operating Facilities

    The pollution exposures impacting your contracting work in the field are well documented, but have you considered the pollution risks impacting your owned, rented or leased operating locations? 

    Many contractors have physical locations that support their work in the field, which can include offices, storage buildings, equipment/vehicle maintenance facilities, fuel storage, outdoor storage yards, raw materials, etc. 

    Depending on the activities taking place at your operating facility(s), environmental exposures impacting your location(s) can include, but are not limited to;  

    • Storage of bulk materials such as adhesives, stains, fuel, etc. which can be hazardous in the event of severe weather, fire, or faulty work. 
    • Vapor intrusion from 3rd party properties migrating onto yours
    • Storm water run-off from machinery and/or materials stored outdoors on the property, & employee parking lots. 
    • Underground ground & above ground storage tanks, totes, barrels, drums, etc. 
    • Unknown contamination from historical property uses 
    • Storage of waste oils, anti-freeze, batteries, hydraulic fluid, PFAS chemicals, etc. 
    • Illegal dumping of waste by 3rd parties (midnight dumping)
    • Vandalism creating a pollution liability 
    • Pollutants from neighboring properties migrating onto your property 
    • Mold, asbestos, silica, lead, etc.
    • Impacting underground utilities 
    • Nuisance odors from batch plants, idling equipment, etc. 
    • Loading and unloading products/materials over unsealed or cracked surfaces 
    • Devaluation of property value due to a buyer’s uncertainty concerning possible present contamination

    Environmental Loss Examples 

    1. While moving a large piece of equipment at a contractor’s storage facility, the forklift operator hit an aboveground storage tank releasing 10,000 gallons onto the ground that migrated onto neighboring properties before emergency response crews could respond.  Area businesses and residents were evacuated.  Claims for bodily injury, cleanup, property damage… exceeded $400,000. 
    2. During the night an unknown party illegally placed drums of hazardous liquid into a dumpster at a drilling contractor’s equipment storage facility.  The containers were not leaking, but the cost to properly dispose of the hazardous liquid cost the drilling contractor roughly $50,000. 
    3. A trucking contractor’s vehicle wash bay experienced a release from the piping system, causing a substantial amount of cleaning solvents to enter the surrounding soil and ground water.  Cost to remediate the cleaning solvents from the soil and ground water was in excess of $250,000.
    4. A construction management company was remodeling and expanding their home office. During the project, the excavation contractor hired to prepare the site for the expansion excavated through and ruptured an unmarked gas line. The excavation contractor was liable for cleanup costs and business interruption expenses, which totaled over $300,000. Due to the size of the loss, the excavation contractor was forced out of business, leaving the construction management company (property owner) to cover the costs. 
    5. A HVAC contractor was hired to upgrade the heating system at a construction management company’s office. While working in the building, the HVAC contractor failed to vent the system properly, causing a release of carbon monoxide. Employees at the office began complaining of headaches and nausea, and were rushed to the local hospital. As a result, several bodily injury suits were filed against the construction management company (property owner of the office building) in excess of $1,000,000. 
    6. The concrete secondary containment of a 10,000-gallon aboveground diesel storage tank located at a contractor’s office/storage facility cracked. The release from the tank spilled 8,000 gallons into the containment area of the tank. Over the weekend diesel fuel seeped into the underlying soils.  Total cost for investigation, removal, and disposal exceeded $320,000. 
    7. A contractor routinely stored barrels of fuel, oil, anti-freeze, paint thinners, and other solvents at their outdoor storage yard. While loading about 1,000 pounds of potentially hazardous products onto a truck, five barrels slipped off the fork lift releasing the contents.  Fortunately, the contracting company had an emergency response plan in place and their emergency response team was able to contain most of the contaminants.  Cost of the additional cleanup was $70,000.

    Insurance Product Solution

    Environmental Impairment Liability (EIL) 

    Sometimes referred to as Pollution Legal Liability, EIL is for contractors that own, rent, lease, or occupy a property, which is susceptible to economic loss caused by pollution that actually, or allegedly originated from their location, or migrates onto their location from a neighboring property. 

    EIL Policies Can Provide Coverage for 

    • New pollution conditions and/or unknown preexisting conditions
    • Third party bodily injury & property damage
    • on and off site clean-up costs
    • 3rd and/or 1st party business interruption
    • Legal defense expenses
    • Above ground storage tanks
    • Non-Owned Disposal Site Liability 
    • Transportation Pollution Liability
    • Can be included with Contractors Pollution Liability on a package policy
    • Blanket coverage for insureds with multiple locations

    Policy Terms, Limits, & Premiums

    • Minimum premiums start at roughly $2,000 for $1M/$1M limits
    • $5,000 minimum deductible 
    • Up to $25M in limits available, higher with towers 
    • Multi-year terms available up to 10-years 

  • Concrete Suppliers

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. In other words, something that ends up where it doesn’t belong. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Most commercial insureds assume that claims arising from their operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves commercial insureds with gaps in coverage. What pollutants are impacting your business?

    Environmental Exposures Impacting Concrete Suppliers

    May include, but are not limited to: Silica;  Mixers;  Release of oils/fuels from equipment;  Spills from mobile storage tanks;  Chemical burns from wet concrete; Products Pollution liability;   Storm water runoff;  Pollution cleanup and third party liabilities that occur as a result of a fire;  Contamination from neighboring property migrating onto yours;  No auditing of waste handling and disposal companies;  Natural resource damages;  Vapor intrusion;  Storage and/or transportation of raw materials;  Hydraulic fluid leaks;   Uncertainties about the historical use and conditions of property;  Obsolete and remote equipment storage (bone) yards where contaminants percolate into the soil/groundwater;  Nuisance odors;  No emergency response training for employees;  Spills and leaks from the storage and handling (loading/unloading) of raw  material containers such as drums, totes or bags from vehicles, rail cars barges…;  Improper characterization of hazardous waste….      

    Environmental Claim Scenarios

    • A waste hauler was hired to transport used equipment oil and fluids to a 3rd party recycling facility. During transportation, the hauler got into an accident, causing the contents of the tanker to spill into the soil and a nearby creek.  Under Federal law (CERCLA) you own your waste from cradle to grave, so the concrete supplier had to pay their apportionment of the $2,000,000 expense for remediation. 
    • Over the weekend, a major thunderstorm caused the storm water runoff control system to fail at a Ready-Mix facility, allowing sediment to flow down grade through neighboring properties, roads, and into a nearby lake.  The owner was responsible for cleanup costs, natural resource damages, and 3rd party property damage claims, which exceeded $3,500,000.  
    • Contaminants were discovered when testing water quality at a new residential development. The developers sued a nearby concrete supplier, who’s property was up gradient from the development.  After extensive testing it was determined that storm water runoff from the concrete suppliers property was the source of the pollution.  Total cost to the concrete supplier exceeded $1,000,000. 
    • The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils.  Total cost for investigation, removal, and disposal exceeded $275,000. 
    • During a particularly dry spell, heavy winds allowed silica dust to drift from a concrete supplier’s property into a neighboring community. The insured filed a claim with their GL carrier for the resulting property damage and bodily injury, but the insurer denied the claim, due to the policy’s pollution exclusion. The concrete supplier had to cover 100% of the loss, which totaled over $1,000,000. 
    •  A Ready-Mix Company had a location on their property where they would deposit extra cement and let it dry out before disposing of it.  Over several years, storm water runoff took contaminants from the drying area into the ground water.  The ground water contaminated some municipal drinking water wells.  Cost of remediation, third party bodily injury, legal fees… exceeded $2,000,000.   

    Overlooked Benefits of Environmental Liability Insurance

    Unlike most liability exposures impacting Concrete Suppliers, pollution losses are not a frequency risk, but rather a severity risk. Since every Concrete Supplier has numerous environmental exposures, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insurance.

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often the clean-up costs are far less than other costs that can arise from the loss.

    • Defense Costs:  Environmental liabilities are relatively new and very litigious.  Even if you do nothing wrong you can still get named in a suit and must expense defense costs i.e. legal fees, environmental investigations, etc.  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  Most the time the cost to clean up the environmental problem/s is far less than the associated claims that come in from third parties for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Coverages

    Premise Pollution Liability (PPL) 

    PPL is for commercial insured’s susceptible to economic loss from pollution conditions that actually, or allegedly originated from their owned or leased properties. This coverage is for those who own, operate, lease, or have any other insurable interest in real property and the operations. Coverage can be written in a variety of ways addressing unknown preexisting conditions or new conditions. Coverage can include third party bodily injury and property damage along with business interruption and extra expense, on and off site clean-up costs, legal defense expenses, non-owned disposal sites, transportation and more. PPL can be offered on multi-year terms, and multiple properties can be packaged together on a single policy.  Most PPL policies also cover above ground storage tanks.

    Transportation Pollution Liability

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of transported cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and overturn of transported cargo.    

    Contractors Pollution Liability (CPL)

    Contractors Pollution Liability (CPL) is for insureds that perform contracting work away from any premises they own, rent, lease or occupy, should they cause or exacerbate an environmental condition while performing their contractor services.  

    Coverage can be written on a job specific basis, or on a blanket basis to cover all the work performed by the insured.  Most policies can be endorsed to cover transportation pollution liability, mold, lead, and asbestos, defense outside the limits, off-site disposal coverage, and more. Contractors incorporating CPL coverage as part of their risk transfer strategy, drive their growth and profits by marketing the benefits CPL coverage affords in reducing job interruption due to environmental issues.  A major environmental liability exposure faced by all contactors lies in who they are doing business with.  If there is an environmental loss at a job site, innocent contractors can and do get named in lawsuits.  Do your subs/vendors have CPL insurance if they cause an environmental loss?

    Underground Storage Tanks

    Financial responsibility requirements ensure that owners and operators of underground storage tank systems have the ability to financially handle a release from an underground storage tank. The responsibility encompasses the ability to pay funds for corrective action and third party bodily injury and property damage from non-sudden and sudden and accidental releases from a regulated underground tank system.  

    Property Transfer Liability 

    When buying, or selling property there can be unknown preexisting environmental conditions. Since a Phase I or Phase II survey cannot guarantee uncovering all potential environmental liabilities, insurance companies have created property transfer insurance. This coverage protects the new owner or any party with an insurable interest, against unknown environmental conditions that may be discovered during the policy period, that were not caused by the new owner. 

    Property transfer coverage assists to keep the property at its maximum value while allowing the insured to negotiate more favorable loan terms than property not supported by this coverage.      

  • Concrete Additive Contractors & Manufacturers

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Often times commercial insureds assume that claims arising from operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves many insureds exposed to potentially uncovered claims. What pollutants are impacting your business?

    Potential Environmental Exposures

    May include, but are not limited to: Emulsifiers; storm water runoff; mold; transportation of raw materials; silica; asbestos; natural resource damage; storage of raw materials; illegal disposal of waste by 3rd parties at jobsites (midnight dumping); release of oils/fuels from equipment; spills from mobile storage tanks; exacerbating preexisting contaminated material; puncturing underground utilities or storage tanks; ground water contamination; pollution from neighboring properties migrating onto yours; historical contamination from past uses of the properties; vapor Intrusion;  easements that cross the property which may leak or spill hazardous materials; adverse reactions and interactions of chemical compounds that accidentally commingle during a fire; No emergency and spill control plans; nuisance odors;  devaluation of real estate asset due to buyers uncertainty concerning possible contaminants;  Silica;  etc. 

    Environmental Claim Examples 

    1. While transporting material to a job site, a concrete additive contractor got into an accident which caused most for the raw materials to enter a nearby stream. Remediation costs and natural resource damages totaled over $250,000.     
    2. A concrete contractor laid an undercoat of slag while creating a new runway for an airport in the Midwest. After the runway was completed, it was discovered that the slag was contaminated and was leaching pollutants into a tributary of one of the Great Lakes. Both the concrete and concrete additive contractors were named, with the total cost of the claim exceeding $400,000. 
    3. A concrete additive manufacturer began expansion of the production line area. During excavation, oily soils with a petroleum odor were discovered. Further investigation uncovered an old, undocumented sludge-drying pit, which the previous owner used back in the 1940’s. The manufacturer had to remove and remediate the soils at his expense. Cleanup costs exceeded $300,000. 
    4. The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils and required costly excavation and removal. The total cost for investigation, removal and disposal exceeded $320,000.
    5. A concrete additive contractor worked on a new commercial property’s foundation. 2-years after the job was completed, mold was discovered in the building. The additive contractor was named in the suit, which included other contractors that worked on the project. After a lengthy legal dispute, the concrete additive contractor was removed from the suit. However, they had already expensed over $100,000 in legal fees. 
    6. During the night, an unknown party illegally placed drums of hazardous waste into a dumpster at a commercial company’s building.  The containers were not leaking, but the cost to properly dispose of the illegally dumped waste cost roughly $50,000. 
    7. A concrete additive manufacturer hired a waste hauler to transport their products. During transportation the hauler got into an accident, causing the truck to overturn and spills its load into a nearby stream.  Under CERCLA, the concrete additive manufacturer must contribute for their apportionment of the load for cleanup cost since federal law states that you own your waste from cradle to grave.  Cost to settle the claim for the was $700,000. 
    1. While performing construction, a cement truck started leaking hazardous materials on the roadway and into a nearby grassy recreational area.  Before the affected area was cleaned, it started to rain heavily.  An emergency contractor was called in to prevent the spread of materials and implemented a cleanup of the affected areas.

    Overlooked Benefits of Environmental Liability Insurance 

    Unlike most liability exposures impacting Concrete Additive Contractors, pollution losses are not a frequency risk, but rather a severity risk. Since every Concrete Additive Contractor is impacted by environmental liabilities, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insurance.

    Three Overlooked Benefits

    1. Defense Costs:  Environmental liabilities are relatively new and very litigious.  Even if you do nothing wrong you can still get named in a suit and have to expense defense costs i.e. legal fees, environmental investigations, etc.  
    2.  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    3. Third Party Liability:  The majority of the time the cost to clean up the environmental problem/s is far less than the associated claims that come in from third parties for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Products 

    Contractors Pollution Liability (CPL)

    Contractors Pollution Liability (CPL) insurance protects the insured should they cause or exacerbate an environmental condition while performing their contractor services.  CPL protects the insured for covered operations performed by or on behalf of the insured, while operating away from any premises they own, rent, lease or occupy. Policies can be endorsed to cover transportation pollution liability, mold, lead, asbestos, defense outside the limits, off-site disposal coverage, etc. Contractors incorporating CPL coverage as part of their risk transfer strategy, drive their growth and profits by marketing the benefits CPL coverage affords in reducing job interruption due to environmental issues.     

    A major environmental liability exposure faced by all contactors lies in who they are doing business with.  If there is an environmental loss at a job site, innocent contractors can and do get named in lawsuits.  

    Environmental Impairment Liability (EIL) 

    EIL is for insured’s that own, rent, lease, operate or have any other insurable interest in real property (i.e. manufacturing facility, or operating facility that may include onsite equipment and material storage, fuel tanks, offices, etc.) that can be susceptible to pollution liabilities that actually or allegedly originated from the insured property. 

    Coverage can include: Pre-existing unknown pollution, new pollution conditions, first party on-site clean up, third party bodily injury, property damage, business interruption and extra expense, off site cleanup costs, legal defense expenses, transportation pollution liability, offsite disposal coverage….  Multi year term policies can be negotiated. 

    Transportation Pollution Liability

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of transported cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and overturn of transported cargo.  

  • Concrete & Masonry Contractors

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Many non-environmental contractors assume that claims arising from operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves many of these contractors exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Concrete & Masonry Contractors 

    Include, but are not limited to: Storm water runoff;  Mold;  Transportation of raw materials;  Silica;  Asbestos; Natural resource damages;  Storage of raw materials;  Illegal disposal of waste by 3rd parties at jobsites (midnight dumping);  Release of oils/fuels from equipment;  Spills from mobile storage tanks;  Exacerbating preexisting contaminated material;  Puncturing underground utilities or storage tanks;  Ground water contamination. 

    Environmental Claim Scenarios

    1. While transporting material to a job site, a concrete contractor got into an accident which caused most for the material to enter a nearby stream. Remediation costs, and natural resource damage claims totaled over $250,000.     
    2. During the construction of a parking garage below a structure, silica dust migrated up an elevator shaft and disbursed throughout all floors of the building.  It was determined that inadequate dust barriers were what allowed the silica to infiltrate the shaft. The liable concrete contractor filed a claim with their GL carrier for the resulting property damage and bodily injury, but its insurer denied the claim, due to the policy’s pollution exclusion. The contractor was ultimately responsible for coving 100% of the loss. 
    3. While setting up concrete forms at a commercial property, a concrete contractor accidentally drove a rebar stake through an unmarked underground fuel line. The leak was not detected until later in the day, allowing hundreds of gallons of fuel to flow into the soil. The contractor filed a claim that his insurance denied due to the pollution exclusion. 
    4. While performing construction, a cement truck started leaking hazardous materials on the roadway and into a nearby grassy recreational area.  Before the affected area was cleaned, it started to rain heavily.  An emergency contractor was called in to prevent the spread of materials and implemented a cleanup of the affected areas.
    5. A concrete contractor unknowingly spread petroleum-contaminated soil across a project site during fill operations at a project site. The contractor was named in a lawsuit for exacerbating the extent of contamination. After lengthy deliberations the contractor was eventually removed from the lawsuit. However, they incurred $90,000 in defense costs. 
    6. A masonry contractor, performing a renovation project at a historic building, was sued by employees of a nearby office building who asserted that they were exposed to silica dust coming from the job site. The claimants reported damages for bodily injury, declaring that required measures were not taken to prevent or minimize dust emission during the project.
    7. A concrete contractor laid an undercoat of slag while working at a commercial property. After the runway was completed, it was discovered that the slag was contaminated and was leaching pollutants into a tributary of one of the Great Lakes. The claim exceeded $400,000. 
    8. During construction activities, a crane that was used to lift concrete barriers overturned. The accident ruptured the crane’s hydraulic hoses, spilling all its fluid onto the ground. The contractor was required to pay clean-up costs from the spill.

    Overlooked Benefits of Environmental Liability Insurance 

    Unlike most liability exposures impacting Concrete & Masonry Contractors, pollution losses are not a frequency risk, but rather a severity risk. Because all Concrete & Masonry Contractors have notable environmental exposures, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insurance.

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often times the clean-up costs are far less than other costs that can arise from the loss. 

    • Defense Costs:  Environmental liabilities are relatively new and very litigious.  Even if you do nothing wrong you can still get named in a suit and have to expense defense costs i.e. legal fees, environmental investigations, etc.  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  The majority of the time the cost to clean up the environmental problem/s is far less than the associated claims that come in from third parties for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Coverages 

    Contractors Pollution Liability (CPL)

    Contractors Pollution Liability (CPL) insurance protects the insured should they cause or exacerbate an environmental condition while performing their contractor services.  CPL protects the insured for covered operations performed by or on behalf of the insured, while operating away from any premises they own, rent, lease or occupy.

    CPL can be offered on a claims made or occurrence basis.  Coverage can be written on a job specific basis, or on a blanket basis to cover all the work performed by the insured.  Most policies can be endorsed to cover transportation pollution liability.  

    Contractors incorporating CPL coverage as part of their risk transfer strategy, drive their growth and profits by marketing the benefits CPL coverage affords in reducing job interruption due to environmental issues.     

    Transportation Pollution Liability

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of transported cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and overturn of transported cargo.    

    Environmental Impairment Liability (EIL) 

    EIL is for contractors that own, rent, lease, operate or have any other insurable interest in real property (a fixed site facility such as a shop, batch plants, cement manufacturing/mixing plant….) that can be susceptible to pollution liabilities that actually or allegedly originated from the insured property. 

    Coverage can include: Pre-existing unknown pollution, new pollution conditions, first party on-site clean up, third party bodily injury, property damage, business interruption and extra expense, off site cleanup costs, legal defense expenses, transportation pollution liability, offsite disposal coverage….  Multi year term policies can be negotiated. 

    Incidental Professional Liability 

    Professional exposures are generally excluded from General Liability and monoline Contractors Pollution Liability policies. In the course of their normal operations, contractors face all types of professional exposures. They may make slight adjustments on the provided plans to get the job done properly, they may supervise subcontractors, or provide other recommendations which could potentially be questioned in the event of a claim. In the event of a professional claim, will your insurance provide coverage? 

  • Painting Contractors

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Many non-environmental contractors assume that claims arising from operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves many of these contractors exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Painting Contractors 

    May include, but are not limited to: Renovation, Repair and Painting (RRP) Federal Law of 2010;  Disturbing / impacting / exacerbating asbestos, lead, mold;  PFOA’s;  Overspray of paints and other pollutants used;  Spill of materials used during transit;  Spill of materials while at a job site;  Spills from mobile storage tanks; Sick building syndrome created from drying of paint / off-gas;  Lead abatement services;  Storm water runoff;  Ground water contamination; Underground utilities;  No auditing of waste handling and disposal companies; Natural resource damages;  Vapor intrusion;  Waste waters generated from cleaning equipment;  Release of oils/fuels from equipment;  Vandalism; Spills during loading, unloading and transportation of paint;  Warehousing raw materials and finished paint;  Toxic Release Inventory (TRI) chemicals; Products pollution;  Damaging fuel tanks, hydraulic fluid lines, boilers, utilities, etc. while power washing at a customer’s location;  Faulty hose hook-up and/or pump failures;  Accidentally using contaminated water while prepping;  Odor drifting;  Containment system failures;  3rd party nuisance claims;  and more…

    Painting Claim Scenarios

    1. While painting the interior of a nursing home, the contractor was sued by over a dozen residents alleging that they were overcome by fumes as a result of inadequate venting. Total claim was over $200,000.
    2. While working at a jobsite, a painting contractor accidentally punctured a small water pipe which was located behind the wall. The contractor did not notice the water leak, which lead to a substantial amount of mold grew between the walls. The contractor was held responsible for clean-up of the mold as well as third party bodily injury claims, which totaled over $150,000. 
    3. A child who lived in an apartment building constructed in the 1970s was diagnosed with lead poisoning. The renovation of the building by a painting contractor allegedly caused unsafe conditions for the child, and the child’s parents filed a bodily injury claim against the painting contractor. As part of the claim investigation, an expert was hired and other potential causes for the lead poisoning were discovered. As a result, the painting contractor wasn’t held liable. However, the contractor still accumulated over $50,000 in legal fees fighting the claim. 
    4. After applying a coat of paint to a new commercial structure, a sudden rainstorm that wasn’t forecasted washed paint from the exterior of the building into the surrounding ground. Cost to remediate the paint from the soil was roughly $40,000. 
    5. A painting contractor stored drums of spent solvents at a jobsite.  While employees were moving the drums, the fork lift operator accidentally knocked the drums over.  Before the spill was contained, solvent ran across the property and onto neighboring properties and into a small creek.  Claims for cleanup costs, third party bodily injury and property damage, legal fees, natural resource damages along with third party business interruption costs exceeded $500,000.
    6.  A painting contractor was hired to perform work at a property that had just been restored from flooding / file. Several months after the job had been completed, mold was discovered between the walls where the painting contractor had worked, and a suit was filed.  After further investigation, it was found that the mold was due to a failure made by the restoration contractor. The painting contractor was removed from the suit. However, they had already expensed over $25,000 in legal defense fighting the claim. 
    7. A painting contractor hired a waste hauler to transport its left-over paints and solvents to a 3rd party disposal site. The waste hauler got into an accident which caused the contents of the tanker to be released directly into a creek.  Under Federal law (CERCLA) you own your waste from cradle-to-grave, so the painting contractor had to pay their apportionment of the remediation costs, which totaled $300,000.     

    Pressure washing Claim Scenarios

    1. A painting contractor was sued when mold was discovered at a commercial building a year after they had completed a painting job. While cleaning the area with high pressure hoses, the painter unknowingly punctured a water line. Lover time the water built up insured the building walls, which caused mold to develop. The contractor was responsible for remediation, 3rd party bodily injury and property damage, as well as 3rd party business interruption, as the customer had to suspend operations while the mold was being remediated. Total cost of the claim exceeded $600,000. 
    2. A contractor used high pressure cleaning equipment to clean insured an industrial building prior to painting. It was later found that the HVAC system was home to a dangerous fungus, which spread throughout the building during the cleaning. A number of employees in the building became infected with the fungus. Some of which were critically infected. The contractor was found liable for the spread of the fungus and faced bodily injury and property damage claims in excess of $1 million.
    3. While cleaning a commercial production area prior to painting, the contractor unknowingly sprayed areas coated with lead based paint. Lucky for the contractor, the exacerbation of the lead based paint was discovered shortly thereafter, preventing any claims for 3rd party bodily injury. The total cost to survey and remediate the lead paint was $50,000.  
    4. 6-months after completing a job, the customer discovered mold in their building. The customer sued the painting contractor for the cost of remediation. After further investigation, it was determined that the painting contractor was not responsible for the mold, and was removed from the suit. However, they had already expensed over $20,000 in legal fees. 

    Overlooked Benefits of Environmental Liability Insurance

    • Defense Costs:  Environmental liabilities are relatively new and very litigious.  Even if you do nothing wrong you can still get named in a suit and have to expense defense costs i.e. legal fees, environmental investigations, etc.  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  The majority of the time the cost to clean up the environmental problem/s is far less than the associated claims that come in from third parties for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Coverages

    Contractors Pollution Liability (CPL)

    Contractors Pollution Liability (CPL) insurance protects the insured should they cause or exacerbate an environmental condition while performing their contractor services.  CPL protects the insured for covered operations performed by or on behalf of the insured, while operating away from any premises they own, rent, lease or occupy.

    CPL can be offered on a claims made or occurrence basis.  Coverage can be written on a job specific basis, or on a blanket basis to cover all the work performed by the insured.  Most policies can be endorsed to cover transportation pollution liability, mold, lead, and asbestos, defense outside the limits, off-site disposal coverage, and more. Contractors incorporating CPL coverage as part of their risk transfer strategy, drive their growth and profits by marketing the benefits CPL coverage affords in reducing job interruption due to environmental issues.  A major environmental liability exposure faced by all contactors lies in who they are doing business with.  If there is an environmental loss at a job site, innocent contractors can and do get named in lawsuits.  Do your subs/vendors have CPL insurance if they cause an environmental loss?

    Environmental Impairment Liability (EIL) 

    EIL is for contractors that own, rent, lease, operate or have any other insurable interest in real property (a fixed site facility such as a shop, batch plants, cement manufacturing/mixing plant….) that can be susceptible to pollution liabilities that actually or allegedly originated from the insured property. 

    Coverage can include: Pre-existing unknown pollution, new pollution conditions, first party on-site clean up, third party bodily injury, property damage, business interruption and extra expense, off site cleanup costs, legal defense expenses, transportation pollution liability, offsite disposal coverage….  Multi year term policies can be negotiated. 

    Transportation Pollution Liability

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of transported cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and overturn of transported cargo.    

    Incidental Professional Liability 

    Professional exposures are generally excluded from General Liability and monoline Contractors Pollution Liability policies. In the course of their normal operations, contractors face all types of professional exposures. They may make slight adjustments on the provided plans to get the job done properly, they may supervise subcontractors, or provide other recommendations which could potentially be questioned in the event of a claim. In the event of a professional claim, will your insurance provide coverage? 

     

  • Commercial Livestock Operations

    What is a Pollutant? 

    Any material, substance, liquid, product… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Commercial livestock operations should be aware that pollutants (such as manure, herbicides, fertilizer, etc.) are excluded from coverage on most GL policies. And GL policies that do provide pollution coverage typically do so on a limited basis, with inadequate limits and/or strict discovery and reporting requirements for there to be coverage. In the event of a pollution loss at one of your properties, does your insurance provide adequate coverage? 

    Environmental Exposures Impacting Commercial Livestock Operations

    Include, but are not limited to; Storage, use and disposal of fertilizers, pesticides (Glyphosate), and herbicides;  Animal waste management;  Disposal of liquid wastes in septic or leach systems;  Storage of fuels, antifreeze, oil and hydraulic fluids;  Leaking above and/or underground storage tanks;  Air emissions from chemical applications and animal waste;  Storm water runoff; Vapor intrusion;  Spills from loading and unloading of farm equipment and supplies;  Faulty refrigeration units;  Overuse of irrigation;  On-site disposal of trash, garbage and other waste materials;  Old equipment storage yards; On-site compost piles, Wastewater lagoons or injection wells;  Historical contamination;  Natural resource damages;  Old or abandoned wells not properly closed allowing contamination into the soil and ground water;  Improper management of protected or sensitive areas like wetlands;  Vandalism;  Easements on the property (rail/roadways, pipelines, power lines, waterways) with potential environmental implications;  Uncontained floor drains;  In-ground sumps and pits;  Inadequate or no auditing of hazardous and non-hazardous waste handlers;  Spills and / or air emissions from emergency power generator systems;  Adverse reactions and interactions of chemical compounds that accidentally commingle during a fire;  Siltation of nearby streams from improper erosion control management; Silica;  Pollution cleanup and liabilities that occur after a fire is put out….

    Environmental Claim Scenarios

    1. During an unusually heavy rainstorm, the wall of a farms on site lagoon used to treat pig wastes collapsed.  More than 150,000 gallons of fecal waste flowed offsite, onto neighboring properties and into a river.  Waste cleanup costs exceeded $350,000, while third party damage claims exceeded $75,000.
    2. A property owner had his drinking water well tested prior to selling his land.  Testing revealed that the well contained an alarmingly high concentration of total petroleum hydrocarbons, further investigation revealed that the source of the contamination were several dozen drums of waste oil and maintenance fluids buried on a neighboring farm.  Though the drums were buried by the previous farm owner, the current owner was nevertheless responsible for disposal of the drums, soil and groundwater cleanup, and bodily injury and property damage claims submitted by the neighboring property owner.  Total cost exceeded $1,000,000 and caused the farmers bankruptcy.
    3. A slaughterhouse disposed of all its waste down a floor drain.  The drain was connected to a storm sewer drain that led directly to a nearby stream.  A fish kill occurred as a result of high biological oxygen demand in the stream.  Under the Clean Water Act (CWA), a local environmental group filed suit for loss of the stream.  The slaughterhouse spent $750,000 remediating the problem.
    4. A dairy farmer was using treated wastewater as a fertilizer in a land application process.  He did not comply with permitting regulations nor did he have the wastewater tested prior to application.  After several months of application, heavy metals and high counts of e-coli were found in the soils.  The farmer was required to pay remediation costs in excess of $265,000.
    5. Over a period of several years, storm water from a livestock operation entered a nearby stream and lake.  Due to excessive algae and bacteria in the lake, nearby residents and businesses filed claims that exceeded $2,000,000 for property damage, loss of enjoyment and perceived bodily injury. 
    6. Pilgrim’s Pride Corp., and three business associates were fined $500,000 by the Texas Natural Resource Conservation Commission for alleged violations of the state’s air, water and waste standards.  TNRCC found at least four alleged instances of unauthorized wastewater discharges and three alleged nuisance orders instances at two processing plants owned by the Pittsburgh, Texas based Food Company.
    7. Phase I and Phase II environmental assessments involve limited sampling of a property and cannot guarantee that the property is clean. For example, a real estate limited partnership, acquired property previously used for farming on which they planned to build a mall. The firm hired a consultant to conduct a Phase I Environmental Assessment. The property was determined to be “clean.” However, when excavation for the mall began, 100 drums of buried pesticides and herbicides were unearthed. The chemicals contaminated the soil and had to be removed at the firm’s expense. Remediation and drum disposal costs exceeded $750,000 
    8. The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils and required costly excavation and removal. The total cost for investigation, removal and disposal exceeded $320,000.  
    9. While transporting manure over the road, the drive got into an accident, causing the load spill from the into a nearby stream. Costs for investigation, remediation, & natural resource damages were in excess of $150,000. 

    Overlooked Benefits of Environmental Liability Insurance

    Unlike most liability exposures impacting commercial livestock operations, pollution losses tend to be a severity versus frequency risk. Because all commercial livestock operations face notable environmental exposures, consideration needs to be given to the economies of scale afforded with Environmental Liability Insurance as part of your risk transfer strategy, versus self-insurance.

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often the clean-up costs are far less than other costs that can arise from the loss. 

    Three Overlooked Benefits of Environmental Liability Insurance;   

    1. Defense Costs:  Environmental liabilities are relatively new and very litigious.  Even if you do nothing wrong you can still get named in a suit and must expense defense costs i.e. legal fees, environmental investigations, etc.  
    2. Claim Management:  All policies come with specialists to assist you in handling a claim.  Who oversees communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    3. Third Party Liability:  The majority of the time the cost to clean up the environmental problem/s is far less than the associated claims that come in from third parties for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Products

    Environmental Impairment Liability (EIL) 

    EIL is for livestock operations susceptible to economic loss caused by pollution that actually or allegedly originated from their properties.  Sometimes referred to as pollution legal liability this coverage is for those who own, operate, lease, or have any other insurable interest in real property and/or the operations. Coverage can be written in a variety of ways addressing unknown preexisting conditions or new conditions.  Coverage can include third party bodily injury and property damage along with business interruption and extra expense, on and off-site cleanup costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multiyear terms.  Most EIL policies cover above ground storage tanks.  You can cover multiple locations on a single policy.

    Transportation pollution Liability 

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or releases of transported cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and overturn of transported cargo.  You need to strategize on your exposure to transportation.  How are goods received?  FOB point of Shipment or FOB point of delivery?  Do not be confused by thinking the MCS-90 endorsement is auto pollution liability coverage.  

    Underground Storage Tanks

    Storage tank financial responsibility requirements ensure that owners/operators of underground storage tank systems can financially handle a release from the tank system. The responsibility encompasses the ability to pay funds for corrective action and third-party bodily injury and property damage from non-sudden and sudden and accidental releases from a regulated underground tank system.  

    Real estate developers/owners with a financial responsibility strategy dependent upon state UST funds need to regularly confirm fund solvency and length of time it will take to get reimbursed.  If part of your business strategy depends upon the state fund, this means just that, you are putting the future success of your business in the hands of the state.  You need to strategize on “just how strong is your business” if you are putting its future in the hands of your state government. 

    Contractors Pollution Liability (CPL)

    Note:  livestock operations have potential environmental exposures from the vendors they hire to perform services, i.e. co-op services, mechanical, plumbing, HVAC, electrical, refrigeration, animal waste land application, herbicide / pesticide application, harvesting…).  Should your vendors cause an environmental problem or exacerbate an existing environmental issue their general liability insurance policy typically will have either an absolute or total pollution exclusion.  In order to be protected you should make sure your vendors have Contractors Pollution Liability (CPL) coverage before they begin doing work.

    CPL provides coverage should an insured, while performing their covered operations, cause or exacerbate a pollution liability while working at a 3rd party location.  For these contractors there is contractor’s pollution liability (CPL) coverage.

    Property Transfer Coverage

    Note:  This coverage is designed for buyers or sellers of real properties.

    When buying or selling property there can be unknown preexisting environmental conditions. Since environmental due diligence (All Appropriate Inquiry (AAI), a Phase I or Phase II survey, Baseline Environmental Assessment (BEA)….), cannot guarantee uncovering all potential environmental liabilities, insurance companies have created property transfer insurance. This coverage protects the new owner or any party with an insurable interest, against unknown environmental conditions that may be discovered during the policy period, that were not caused by the new owner. 

    This coverage not only helps to keep the property at its maximum value, it will assist the purchaser in being able to secure the necessary financing to complete their transaction.  You can cover multiple locations on a single policy.

  • Commercial Janitorial Contractors

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Many non-environmental contractors assume that claims arising from operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves many of these contractors exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Commercial Janitorial Contractors 

    Include, but are not limited to: Spills during the loading, unloading, and transportation of cleaning chemical and equipment; Contaminating water sources; PFAS chemicals; Exacerbating pre-existing unknown pollution conditions; 3rd party business interruption; Odor drifting; Illegal disposal of waste by 3rd parties; Legal defense for 3rd party nuisance claims; Mold; Lead; Asbestos; Non-owned disposal site liability; Pollution events impacting your owned operating facility; Adverse reactions and interactions of chemical compounds; No emergency and spill control plans; etc. 

    Environmental Claim Examples

    1. While transporting cleaning chemicals and supplies to a jobsite, a commercial janitorial contractor got into an accident, which resulted in the cargo catching fire.  The burning cargo created toxic fumes and when the fire department put out the fire it created contaminant runoff that flowed into a nearby stream.  Cost to remediate the site, third party bodily injury & property damage, and natural resource damages exceeded $800,000.
    2. During the night, a commercial janitorial employee accidentally punctured a hydraulic fluid hose while cleaning at commercial property. Over 50 gallons of hydraulic fluid were released before the leak could be contained. Total cost of the cleanup was only $3,000. However, they also had to pay their customer over $10,000 in business interruption costs because the customer was not able to operate the next day while the cleanup was taking place. 
    3. A commercial janitorial contractor accidentally mixed non-compatible chemicals for cleaning.  The fumes from the chemicals forced the evacuation of all of the building tenants while clean up took place.  Third party bodily injury, property damage, and business interruption claims were filed against the janitorial service company, which exceeded $1,000,000.
    4. While working at an office building, a commercial janitorial employee accidentally spilled cleaning chemicals into a salt-water fish tank that was in the lobby, killing the aquatic life. The janitorial contractor filed a claim with their GL carrier for the price to replace the fish & coral, which totaled over $50,000. However, the claim was denied as the cleaning chemicals were determined to have “polluted” the saltwater aquarium.  
    5. While working at a shopping center, an employee of a janitorial company inadvertently mixed ammonia and chlorine-based cleaning products.  The mixture resulted in a toxic cloud of ammonia chloride that caused respiratory distress in dozens of shoppers and a shutdown of the center for a period of time.  The contractor was held responsible for the defense of bodily injury claims.  Additionally, numerous business interruptions claims were filed by tenants.

    Unlike most liability exposures impacting Commercial Janitorial Contractors, pollution losses are not a frequency risk, but rather a severity risk. Because all Commercial Janitorial Contractors have notable environmental exposures, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insurance.

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often times the clean-up costs are far less than other costs that can arise from the loss. Three of the most overlooked benefits of investing in Environmental Liability insurance include; 

    Overlooked Benefits of environmental liability insurance:

    • Defense Costs:  Environmental liabilities are relatively new and very litigious.  Even if you do nothing wrong you can still get named in a suit and have to expense defense costs i.e. legal fees, environmental investigations, etc.  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  The majority of the time the cost to clean up the environmental problem/s is far less than the associated claims that come in from third parties for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Coverages

    Contractors Pollution Liability (CPL)

    Contractors Pollution Liability (CPL) insurance protects the insured should they cause or exacerbate an environmental condition while performing their contractor services.  CPL protects the insured for covered operations performed by or on behalf of the insured, while operating away from any premises they own, rent, lease or occupy.

    CPL can be offered on a claims made or occurrence basis.  Coverage can be written on a job specific basis, or on a blanket basis to cover all the work performed by the insured.  Most policies can be endorsed to cover transportation pollution liability, mold, lead, and asbestos, defense outside the limits, off-site disposal coverage, and more. Contractors incorporating CPL coverage as part of their risk transfer strategy, drive their growth and profits by marketing the benefits CPL coverage affords in reducing job interruption due to environmental issues.  A major environmental liability exposure faced by all contactors lies in who they are doing business with.  If there is an environmental loss at a job site, innocent contractors can and do get named in lawsuits.  Do your subs/vendors have CPL insurance if they cause an environmental loss?

    ENVIRONMENTAL IMPAIRMENT LIABILITY (EIL) 

    EIL is for janitorial contractors that own, rent, lease, operate or have any other insurable interest in real property (a fixed site facility such as a shop, asphalt plants….) that can be susceptible to pollution liabilities that actually or allegedly originated from the insured property. 

    Coverage can include: Pre-existing unknown pollution, new pollution conditions, first party on-site clean up, third party bodily injury, property damage, business interruption and extra expense, off site cleanup costs, legal defense expenses, transportation pollution liability, offsite disposal coverage….  Multi year term policies can be negotiated. 

    Transportation Pollution Liability

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of transported cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and overturn of transported cargo.    

  • Commercial Farming

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Commercial farmers should be aware that pollutants (such as pesticides, herbicides, fertilizer, etc.) are excluded from coverage on most GL policies. And GL policies that do provide pollution coverage typically do so on a limited basis, with inadequate limits and/or strict discovery and reporting requirements for there to be coverage. In the event of a pollution loss at one of your properties, does your insurance provide adequate coverage? 

    Environmental Exposures Impacting Commercial Farmers

    Include, but are not limited to; Storage, use and disposal of fertilizers, pesticides, and herbicides;  animal waste management;  disposal of liquid wastes in septic or leach systems;  storage of fuels, antifreeze, oil and hydraulic fluids;  leaking above and/or underground storage tanks;  air emissions from chemical applications and animal waste;  storm water runoff; vapor intrusion;  spills from loading and unloading of farm equipment and supplies;  faulty refrigeration units;  overuse of irrigation;  on-site disposal of trash, garbage and other waste materials;  old equipment storage yards; on-site compost piles, wastewater lagoons or injection wells;  historical contamination;  natural resource damages;  old or abandoned wells not properly closed allowing contamination into the soil and ground water;  improper management of protected or sensitive areas like wetlands;  vandalism;  easements on the property (rail/roadways, pipelines, power lines, waterways) with potential environmental implications;  uncontained floor drains;  in-ground sumps and pits;  inadequate or no auditing of hazardous and non-hazardous waste handlers;  spills and air emissions from emergency power generator systems;  adverse reactions and interactions of chemical compounds that accidentally commingle during a fire;  Siltation of nearby streams from improper erosion control management; Silica and more…

    Environmental Claim Scenarios

    1. During an unusually heavy rainstorm, the wall of a farms on site lagoon used to treat pig wastes collapsed.  More than 150,000 gallons of fecal waste flowed offsite, onto neighbouring properties and into a river.  Waste clean-up costs exceeded $350,000, while third party damage claims exceeded $75,000.
    2. Sudden wind gusts picked up while a farmer was applying concentrated glyphosate to one of his fields.  The wind carried the glyphosate onto a neighboring property, killing a large portion of their NON-RoundUp Ready “organic” crop.  Claims for 3rd party damages were in excess of $75,000. 
    3. A commercial farm regularly worked on equipment in one of their barns, which had a graded floor and drain.  The drain was connected to a storm sewer drain that led directly to a nearby stream.  A fish kill occurred as a result of high biological oxygen demand in the stream. A local environmental group filed suit for loss of the stream under the Clean Water Act (CWA). The farm spent $750,000 remediating the problem.
    4. A farmer was using treated waste water as a fertilizer in a land application process.  He did not comply with permitting regulations nor did he have the wastewater tested prior to application.  After several months of application, heavy metals and high counts of e-coli were found in the soils.  The farmer was required to pay remediation costs in excess of $265,000.
    5. Over a period of several years, storm water runoff flowed down grade over a farmer’s outdoor storage area and into a nearby stream and lake.  Due to excessive algae and bacteria in the lake, residents and businesses filed claims that exceeded $2,000,000 for property damage, loss of enjoyment, and perceived bodily injury. 
    6. While transporting a large quantity of fertilizer to one of their crop fields, a farmer got into an accident, causing the load spill from the into a nearby stream. Costs for investigation, remediation, and natural resource damages was in excess of $150,000. 
    7. A property owner had his drinking water well tested prior to selling his land.  Testing revealed that the well contained an alarmingly high concentration of total petroleum hydrocarbons, further investigation revealed that the source of the contamination were several dozen drums of waste oil and maintenance fluids buried on a neighboring farm.  Though the drums were buried by the previous farm owner, the current owner was nevertheless responsible for disposal of the drums, soil and groundwater cleanup, and bodily injury and property damage claims submitted by the neighboring property owner.  Total cost exceeded $1,000,000. 
    8. The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils and required costly excavation and removal. Total cost for investigation & remediation exceeded $320,000.  
    9. Over the weekend vandals climbed the fence at a chemical / fertilizer distribution facility.  Besides breaking a few windows; they also damaged a valve on a 10,000-gallon tank of chemicals.  The damaged valve leaked until Monday morning when it was discovered by facility employees.  While most of the contents of the tank just needed to be removed and disposed of from the containment area, local environmental officials required subsurface testing of soil and groundwater so that total costs reached $90,000.
    10. A soybean producer sustained a large ammonia release when the piping on their above ground tanks failed causing a release of roughly 5,000 lbs. of liquid ammonia and additional ammonia vapor.  As a result, cleanup costs were incurred and several people at a neighboring facility complained of respiratory issues as a result of the release.  Claims were made for the cleanup costs and bodily injury.
    11. A farm co-op was recently sued by a local citizens organization when it was discovered that their fertilizer storage tank had leaked and contaminated several local drinking water wells.

    Overlooked Benefits of Environmental Liability Insurance

    Unlike most liability exposures impacting commercial farmers, pollution losses are not a frequency risk, but rather a severity risk. Because all commercials farmers face notable environmental exposures, consideration needs to be given to the economies of scale afforded with Environmental Liability Insurance as part of your risk transfer strategy, versus self-insurance.

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often the clean-up costs are far less than other costs that can arise from the loss. 

    Three Overlooked Benefits of Environmental Liability Insurance;   

    • Defense Costs:  Environmental liabilities are relatively new and very litigious.  Even if you do nothing wrong you can still get named in a suit and have to expense defense costs i.e. legal fees, environmental investigations, etc.  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  The majority of the time the cost to clean up the environmental problem/s is far less than the associated claims that come in from third parties for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Products 

    Environmental Impairment Liability (EIL)

    EIL is for agricultural operations susceptible to economic loss caused by pollution that actually or allegedly originated from their properties.  Sometimes referred to as pollution legal liability this coverage is for those who own, operate, lease, or have any other insurable interest in real property and/or the operations. Coverage can be written in a variety of ways addressing unknown preexisting conditions or new conditions.  Coverage can include third party bodily injury and property damage along with business interruption and extra expense, on and off site clean-up costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multiyear terms.  Most EIL policies cover above ground storage tanks.  You can cover multiple locations on a single policy.

    Property Transfer Coverage

    Note:  This coverage is designed for buyers or sellers of real properties.

    When buying or selling property there can be unknown preexisting environmental conditions. Since environmental due diligence (All Appropriate Inquiry (AAI), a Phase I or Phase II survey, Baseline Environmental Assessment (BEA)….), cannot guarantee uncovering all potential environmental liabilities, insurance companies have created property transfer insurance. This coverage protects the new owner or any party with an insurable interest, against unknown environmental conditions that may be discovered during the policy period, that were not caused by the new owner. 

    This coverage not only helps to keep the property at its maximum value, it will assist the purchaser in being able to secure the necessary financing to complete their transaction.  You can cover multiple locations on a single policy.

    Transportation Pollution Liability (TPL) 

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or releases of transported cargo. Broadened transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and over turn of transported cargo.  You need to strategize on your exposure to transportation.  How are goods received?  FOB point of Shipment or FOB point of delivery?  Do not be confused by thinking the MCS-90 endorsement is auto pollution liability coverage.  

    Contractors Pollution Liability (CPL) 

    Note:  Agricultural operations have potential pollution exposures from the vendors they hire to perform services.  Should your vendors cause a pollution problem or exacerbate an existing environmental issue their general liability insurance policy typically will have either an absolute or total pollution exclusion.  In order to be protected you should make sure your vendors have this insurance coverage before they begin doing work.

    CPL coverage can be purchased to meet two specific exposures. First, contractors that perform remedial activities (asbestos, lead, mold, soil or ground water remediation) there is the standard contractor’s pollution liability (CPL) insurance coverage. This protects the insured for pollution conditions they may cause or exacerbate while performing remedial services. This is for covered operations performed by or on behalf of the insured.  The loss must occur away from any premises the insured owns, rents, leases or occupies, in other words while they are performing remedial services in the field.

    Secondly, standard contractors (i.e. general contractors, HVAC, plumbing, electrical, mechanical, janitorial, demolition, drilling, excavation, highway, street and paving contractors, rigging, utility, millwrights, artisan, etc.), agricultural harvesting/handling vendors, co-op services, in performing their operations may cause an environmental liability that is generally excluded from their general liability coverage. For these contractors there is contingent contractor’s pollution liability (CCPL) coverage. Basically they are afforded the same coverage as remedial contractors but the cost to purchase this insurance is substantially less. 

  • Commercial Contractors

    What is a Pollutant? 

    Any material, substance, liquid, product, etc… which is introduced into an environment for other than its intended use / purpose. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances. 

    Many non-environmental contractors assume that claims arising from operations are covered by the general liability policy. However, claims resulting from a “pollution incident” are excluded from most general liability policies, which leaves many of these contractors exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Commercial Contractors 

    Include, but are not limited to: release of oils/fuels from equipment as a result of vandalism; spills from mobile storage tanks; Leaks from elevator hydraulic fluid storage tanks;  excavating through and spreading of unknown preexisting contaminated soil; storm water runoff; lead; asbestos; ground water contamination; underground utilities; puncturing unknown underground storage tanks, barrels or other illegally disposed pollutants; silica; over spray of fertilizers, herbicides; no auditing of waste handling and disposal companies; air emissions from batch plants; mold; unknowingly using contaminated soil as fill; natural resource damages; vapor intrusion; waste waters and chemicals generated from cleaning equipment;  Vapor intrusion….

    Environmental Loss Examples

    • An excavation/grading contractor unknowingly spread petroleum-contaminated soil across a project site during fill operations for a commercial office building. The contractor was named in a lawsuit for exacerbating the extent of contamination. After lengthy deliberations, the contractor was eventually removed from the lawsuit. However, they incurred $90,000 in defense costs. 
    • A utility contractor had to pay cleanup costs and business interruption expenses in excess of $500,000 when they ruptured and unmarked petroleum pipeline.
    • During window installation, a commercial contractor failed to properly seal one of the exterior windows on a mixed-use commercial/residential building. The contractor did not notice the faulty seal, and a substantial amount of mold grew between the walls before anyone noticed. The contractor was held liable for the clean-up of the mold, defense of 3rd party bodily injury, as well as 3rd party business interruption expenses. Total cost of the loss exceeded $1,000,000.
    • A subcontractor working for a street/road contractor performed sandblasting on a bridge.  The bridge was located near a residential area.  Lead containing paint chips and dust from the sandblasting became airborne and migrated onto residential properties requiring cleanup.  The residents filed property damage claims against the contractor for the dust generated by the subcontractor.  Claims totaled $400,000.
    • A general construction company was sued when mold was discovered in a commercial building constructed by the contractor and its subs.  The general contractor was ordered by a court of law to pay mold remediation costs in excess of $600,000 and the contractor had legal fees of $250,000.   
    • An asphalt paving contractor paved a parking lot for a new commercial structure. At the end of the day, the tack coat was sprayed onto the sub-base prior to paving. During the evening, a major thunderstorm caused the tack coat to wash off and flow into a nearby stream. The contractor was responsible for cleanup costs, which exceeded $200,000.  
    • An industrial contractor dropped a piece of heavy equipment from a crane onto a pipe leading to a hydrofluoric acid tank. Acid was emitted creating a vast vapor cloud.  Approximately 3,000 residents were evacuated and 1,000 were treated for respiratory injuries.   The court entered judgment holding the contractor responsible for bodily injury, business interruption, property damage and remediation costs in excess of $10,000,000.  
    • A contractor was reconditioning a tile floor in a property undergoing extensive renovations.  The workers inhaled toxic vapors from the sealants used in the reconditioning process. Several subcontracted workers in the building filed bodily injury claims totaling $75,000 against the contractor. 
    • An interior contractor was hanging new drywall at a property when an employee accidentally drilled through a small water pipe located behind the wall. The contractor did not realize the leak occurred and a substantial amount of mold grew between the walls. The contractor was held liable for the clean-up of the mold, as well as defense of 3rd party bodily injury claims. Total cost of the loss exceeded $50,000. 
    • While working on a historical property, a contractor used a hole saw to cut through a ceiling. Unknown to the contractor, the saw inadvertently disturbed and released asbestos-containing insulation material. The contractor had to pay cleanup costs for the asbestos fibers released throughout the building, costing in excess of $30,000. 
    • A general contractor was responsible for overseeing the renovation of a hospital wing.  When two patients died in the intensive care unit adjacent to the construction zone, the contractor was sued for inadequate monitoring and containment of the construction zone.  The patients’ cause of death was determined to be an organic fungus found in the ventilation system, and traced back to dusts generated during demolition activities in the construction zone.  The contractor apparently misinterpreted construction drawings with regard to the connection of the duct system for the renovation zone and the intensive care unit.  The general contractor was responsible for $10 million in damages.
    • A general contractor installed new carpeting in an office building. One week after the installation, the owner of the office building informed the contractor that employees were complaining of headaches and dizziness. The contractor could not prove that the manufacturers of the carpet or the carpet adhesive were responsible. The contractor filed a claim with their general liability carrier. The claim was denied because the contractor brought the hazardous materials, such as formaldehyde and volatile organic compounds, onto the site.
    • Several office employees became ill from Legionella.  The cause of the Legionella was the improper sealing for the ducts during the installation of a new HVAC unit, which allowed condensation to build up.  The employees sued the property owner and the contractor.
    • A contractor was subject to cleanup costs after vandals opened an onsite mobile refueling tank causing diesel fuel to be released onto virgin soil.

    Benefits of Environmental Liability Insurance

    Commercial contractors generally lack the financial strength to self-insure their environmental liabilities.  Since every commercial contractor is impacted by environmental liabilities consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy versus self-insurance.

    The Three Main Benefits environmental liability insurance offers:  

    • Defense Costs:  Environmental liabilities are relatively new and very litigious.  Even if you do nothing wrong you can still get named in a suit and have to expense defense costs i.e. legal fees, environmental investigations, etc.  
    •  Claim Management:  All policies come with specialists to assist you in handling a claim.  Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages….?
    • Third Party Liability:  The majority of the time the cost to clean up the environmental problem/s is far less than the associated claims that come in from third parties for bodily injury, property damage and business interruption.  You need to look at your client’s and neighbors that can be impacted if you or a sub-contractor/vendor cause an environmental loss.          

    Environmental Liability Insurance Coverages

    Contractors Pollution Liability (CPL)

    Contractors Pollution Liability (CPL) insurance protects the insured should they cause or exacerbate an environmental condition while performing their contractor services.  CPL protects the insured for covered operations performed by or on behalf of the insured, while operating away from any premises they own, rent, lease or occupy.

    CPL can be offered on a claims made or occurrence basis.  Coverage can be written on a job specific basis, or on a blanket basis to cover all the work performed by the insured.  Most policies can be endorsed to cover transportation pollution liability, mold, lead, and asbestos, defense outside the limits, off-site disposal coverage, and more. Contractors incorporating CPL coverage as part of their risk transfer strategy, drive their growth and profits by marketing the benefits CPL coverage affords in reducing job interruption due to environmental issues.  A major environmental liability exposure faced by all contactors lies in who they are doing business with.  If there is an environmental loss at a job site, innocent contractors can and do get named in lawsuits.  Do your subs/vendors have CPL insurance if they cause an environmental loss?

    Environmental Impairment Liability (EIL) 

    EIL is for contractors that own, rent, lease, operate or have any other insurable interest in real property (a fixed site facility such as a shop, batch plants, cement manufacturing/mixing plant….) that can be susceptible to pollution liabilities that actually or allegedly originated from the insured property. 

    Coverage can include: Pre-existing unknown pollution, new pollution conditions, first party on-site clean up, third party bodily injury, property damage, business interruption and extra expense, off site cleanup costs, legal defense expenses, transportation pollution liability, offsite disposal coverage….  Multi year term policies can be negotiated. 

    Transportation Pollution Liability

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of transported cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and overturn of transported cargo. 

    Underground Storage Tanks

    Financial responsibility requirements ensure that owners and operators of underground storage tank systems have the ability to financially handle a release from an underground storage tank. The responsibility encompasses the ability to pay funds for corrective action and third party bodily injury and property damage from non-sudden and sudden and accidental releases from a regulated underground tank system.  

    Property Transfer Liability 

    When buying or selling property there can be unknown preexisting environmental conditions. Since a Phase I or Phase II survey cannot guarantee uncovering all potential environmental liabilities, insurance companies have created property transfer insurance. This coverage protects the new owner or any party with an insurable interest, against unknown environmental conditions that may be discovered during the policy period, that were not caused by the new owner. 

    Property transfer coverage assists to keep the property at its maximum value while allowing the insured to negotiate more favorable loan terms than property not supported by this coverage.