Tag: concrete

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.      

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. 

8. 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.  

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?