Tag: construction

  • UST and AST 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 trucking companies assume that claims arising from their operations are covered by their general liability policy or commercial auto policy. However, claims resulting from a “pollution incident” are typically excluded from general liability and commercial auto policies (except for fluids necessary to operate a vehicle). Policies that do provide pollution coverage, typically do so on a limited basis and with inadequate limits, which leaves trucking companies exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Contractors Performing Underground/Aboveground Construction Services

    Some of the common environmental exposures impacting contractors doing excavation, site preparation, drilling, utilities, include: Stormwater runoff; completed operations exposures including incomplete line hookup or improper system construction causing spills or emissions; fumes, lubricant oils and other fluids leaking from field equipment; release of oils/fuels as a result of vandalism; site preparation/excavation work through preexisting unknown contaminated soil; air emissions from dust and debris, impacting abandoned underground storage tanks, spreading of unknown preexisting contaminated soil as fill, impacting groundwater from drilling and excavation work (i.e. cross contamination of aquifers, etc.); impacting underground utilities and other underground structures;  no auditing of waste handling and disposal companies;  release from portable storage tanks;   natural resource damages;  vapor intrusion, Silica…. 

    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. 

    1. While replacing an AST, a tank contractor employee inadvertently hit the temporary AST holding the contents of the tank being replaced.  By the time the contractors employees were able to set up barriers to contain the spill, the tanks contents migrated into the ground, ground water and nearby by sewer system.  Clean up costs and business interruption claims were in excess of $150,000.
    2. A family operated gas station hired a UST contractor to remove two underground storage tanks and associated contaminated soil.  A backhoe hit a natural gas pipeline causing an explosion.  This parties filed bodily injury claims against the contractor, as well as the owner whose building was destroyed in the explosion.  Claims exceeded $2,500,000.  
    3. An environmental contractor was hired by a convenience store to conduct an underground storage tank compliance inspection.  During the soil-gas survey process, the contractor punctured a diesel fuel line with a probe, causing 11,655 gallons of diesel to spill of which only 4,000 gallons were recovered.  Total claims for cleanup and business interruption exceeded $400,000.
    4. Faulty Pump Contaminates Local Creek and Pond.  During routine transfer of diesel fuel from a fuel truck to an onsite job fuel storage tank, a pump malfunctioned releasing approximately 4,500 gallons of diesel fuel.  The product migrated along the edge of the tanks into a culvert, spilled into an adjacent creek, and pooled in a pond. The state department of environmental management was notified, and the company’s spill response plan was initiated. Approximately 644,300 gallons of contaminated water was removed from the creek and pond at a cost of $63,000.
    5. During excavation a contractor was subject to cleanup costs and business interruption expenses in excess of $500,000 when they ruptured and unmarked petroleum pipeline.

    Benefits of Environmental Liability Insurance

    Tank contractors generally lack the financial strength to self-insure their environmental liabilities.  Since every tank contractor is impacted by environmental liabilities and in most cases required by law to evidence environmental financial assurance 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:  

    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, .  
    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 for UST and AST Contractors

    CONTRACTORS POLLUTION LIABILITY 

    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, asbestos, defense outside the limits, off-site disposal coverage ….  

    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 clean up costs, legal defense expenses, transportation pollution liability, off site 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.      

  • Roofing 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 Roofing Contractors 

    A roofing contractor is a prime example of an insured that does not perform environmental contracting services but has multiple exposures for pollution-related losses. Sealants, adhesives, coatings, and other products used to spray, seal, or repair roofing systems can often be toxic if inhaled. If a contractor fails to properly close off or turn off the HVAC system or properly ventilate the building, fumes from these products can be extremely harmful to the individuals exposed to them within the building. 

    The Pollution Exclusion within the insured’s General Liability policy is not likely to cover a Bodily Injury or Property Damage claim in this scenario, as most GL policies will exclude this type of claim arising from the discharge, dispersal, seepage, migration, release, or escape of a pollutant, such as fumes from one of the products used by the roofing contractor. The contractor could also face a Loss of Use claim if the building were deemed unusable for an extended period. 

    Roofing contractors are also susceptible to other pollution claims, such as mold. By simply improperly installing a roofing system, the risk of water intrusion into a structure increases. Water entering the roofing system and structure can collect and create an ideal environmental for mold, which can be harmful to individuals within the building. The cost of locating and remediating mold can also be extensive as the structure will need to be thoroughly inspected to remove and prevent any moisture that could cause re-growth. Simple defects in the installation or repair of a roofing system can cause large pollution related losses for your insured.

    Environmental Claim Scenarios 

    1. A residential construction company was sued when mold was discovered in multiple spec homes built by the contractor and its subs. Because it could not be determined which party was responsible, the general contractor and a number of its subs were all held liable, and were ordered by a court of law to share in the mold remediation costs. 
    2. A roofing contractor applied polyurethane foam along with layers of elastomeric protective coatings to the roof of a commercial building. After completion of the building, workers in the building began to suffer respiratory problems caused by irritants in the coatings. Suits for bodily injury and business interruption were filed against the general contractor and roofing subcontractor
    3. A roofing contractor installed a new roof at a 250,000 square foot office building and shopping center. The roofing material decomposed and caused a chemical reaction, emitting fumes into the office building. The contractor faced a $400,000 property damage and Loss of Use claim.
    4. While working on a historical residential property, a roofing 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 $20,000. 
    5. A roofing contractor had to pay remediation costs, and business interruption expenses when mold was discovered in a commercial building where the roofing contractor had installed a new roof the previous year. Total cost of the claim exceeded $300,000. 
    6. A roofing contractor was installing a new roof on a commercial property when an employee accidentally drilled through a small water pipe. The contractor did not realize the leak occurred and a substantial amount of mold grew between the walls before anyone noticed. The roofing 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 $70,000. 
    7. A Roofing contractor installed a new roof at a 250,000 square foot office building and shopping center. The roofing material decomposed and caused a chemical reaction, emitting fumes into an office building. The contractor faced a $400,000 property damage and loss of use claim.

    Benefits of Environmental Liability Insurance

    Unlike most liability exposures impacting Roofing Contractors, pollution losses are not a frequency risk, but rather a severity risk. Because all Roofing 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 real estate owners 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. 

    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:  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

    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.  

    Transportation Pollution Liability 

    Generally, commercial auto 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 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; offsite cleanup costs;  legal defense expenses;  transportation pollution liability;  offsite disposal coverage….  Multi year term policies can be negotiated. 

    Underground Storage Tanks

    Financial responsibility requirements ensure that owners and operators of underground storage tank systems can 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.  

    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? 

  • Glass 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 Glass Contractors 

    May include, but are not limited to:  mold resulting from water intrusion or moisture encapsulation; storm water runoff; vapor intrusion; completed operations exposures including faulty installation;  fumes, emissions, or spills of chemicals used during construction (glazing liquids, finishers, sealants, adhesives, solvents, curing compounds); spills from mobile storage tanks;  release of materials as a result of vandalism; lead paint; illegal disposal of waste at a jobsite by unknown 3rd parties; asbestos; product transportation…

    Environmental Loss Examples

    • While installing new windows, a commercial contractor unknowing drilled through a small water pipe located behind a wall. The contractor did not realize the leak occurred, and over time a substantial amount of mold grew between the walls before anyone noticed. The contractor was held liable for the clean-up costs and a number of 3rd party bodily injury claims. Total cost of the loss exceeded $250,000. 
    • A commercial glass contractor installed new windows at a property that had been damaged by a recent storm. 6-months after the job mold was discovered in the building. The property owner sued a number of the contractors, including the glass contractor for faulty installation. After further investigation, it was determined that the glass contractor was not at fault and the suit was dropped. However, the glass contractor had already paid over $40,000 in legal defense costs.  
    • A commercial glass contractor was transporting a large amount of glazing liquid to a large commercial construction site. During transportation the contractor go into an accident. Several of the containers broke, and the glazing liquid released into a nearby stream. Costs for remediation and natural resource damages exceeded $120,000. 
    • A glass installation contractor was contracted to install the window systems on a new research laboratory for a university. The general contractor allowed for changes to the specified caulk used around the windows. The caulk was incompatible with the building façade materials. Although the glazier conducted and documented structural proof tests to ensure that the window, frames, caulk and substrate were water and air tight, the caulk degraded quickly. As a result, adhesion was lost, and water intrusion allowed mold to grow. Cost to remediate the mold exceeded $75,000.  
    • While working on a property renovation project, a glass contractor removed debris to install new windows. It was later discovered that the removed material contained lead based paint. The glass contractor was held liable for “exacerbating” the situation. Remediation, 3rd party bodily injury claims, and legal defense costs exceeded $1,000,000. 

    Benefits of Environmental Liability Insurance

    Because pollution exposures are a severity risk (versus a frequency risk), most glass contractors lack the financial strength to self-insure their environmental liabilities. Since every glass 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 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 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 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. 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 contractors that own, rent, lease, operate or have any other insurable interest in real property (i.e. an operating facility that may include onsite equipment 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, commercial auto 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? 

  • Flooring Contractors

    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. 

    Many 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 of these insureds exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Flooring Contractors

    May include, but are not limited to: PFAS Chemicals; Failure to identify or mischaracterize contamination, such as mold, while performing work;  Hazardous air emission from lacquer, varnish, sealants, formaldehyde and other chemicals;  Silica;  Disturbing lead based paint;  Legal defense for 3rd party nuisance claims;  Puncturing utilities within a building, such as water pipes, fire supersession systems, etc.;  3rd party business interruption;  Asbestos;  Spills or raw materials at jobsites or during transportation;  Faulty installation, allowing mold to develop;  No auditing of 3rd party disposal companies for your unused raw materials and job waste; and more… 

    Environmental Claim Scenarios

    1. While installing a new gym floor at a local high school, inadequate containment allowed fumes to exit the gym and spread throughout parts of the high school. Several students were rushed to the hospital, with one student being in severe condition. Total cost for 3rd party bodily injury claims exceeded $500,000. 
    2. A flooring contractor hired a waste hauler to transport used materials (lacquer, sealants, varnish, etc.) to a 3rd party disposal facility. During transportation, the hauler got into an accident, causing the truck to overturn and spills its load.  Under CERCLA, the contactor 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 insured was over $100,000.
    3. Before rehabbing an old wood floor, the flooring contractor tested for lead based paint. The test came back negative, so the contractor proceeded with reconditioning. A couple days into the project it was discovered that some of the paint did contain lead, which many people had been exposure to over the previous few days. Total cost for remediation, 3rd party bodily injury, 3rd party property damage exceeded $350,000. 
    4. While installing new flooring at a commercial building, a contractor unknowingly punctured a small water pipe beneath the floor. A year later, a massive amount of mold was discovered within the floor and walls of the commercial building. The flooring contractor was found liability for bodily injury, remediation, and business interruption, as the commercial tenants were forced to suspend operations while the mold was being remediated. Total cost of the claim was over $1,000,000. 
    5. While working on an upper floor in a commercial building, a contractor’s saw to cut through the floor, inadvertently disturbing and releasing asbestos-containing insulation material. The contractor had to pay cleanup costs and 3rd party liability claims in excess of $90,000. 

    Benefits of Environmental Liability Insurance

    Unlike most liability exposures impacting Flooring Contractors, pollution losses are not a frequency risk, but rather a severity risk. Since every Flooring 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.

    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 often arise from the loss. 

    Overlooked Benefits of Environmental Liability Insurance:

    1. Defense Costs:  Environmental liabilities are relatively new and 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:  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 

    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. 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, asbestos, defense outside the limits, off-site disposal coverage.   

    Environmental service providers 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.     

    Environmental Impairment Liability (EIL) 

    EIL is for environmental service providers that own, rent, lease, operate or have any other insurable interest in real property (a fixed site facility such as a service garage and shop, transfer/recycling facility, landfill….) 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.   

  • Excavation 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 Excavation Contractors 

    May include, but are not limited to: puncturing unknown underground storage tanks or utilities; release of oils/fuels from equipment; spills from mobile storage tanks; excavating through and/or spreading of unknown preexisting contaminated soil; using unknown contaminated soil as fill; storm water runoff; puncturing unknown illegally buried drums or containers; lead; asbestos; silica; no auditing of waste handling and disposal companies; natural resource damages; vapor intrusion; storage and/or transportation of raw materials; business interruption expenses; leaks from hydraulic fluid storage tanks; etc. 

    Environmental Claim Scenarios

    • An excavation 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. 
    • An excavation contractor ruptured a natural gas pipe while working on a job, which created a large high-pressure release. Due to safety concerns, local authorities evacuated a 2-block radius around the accident while it was being contained, shutting all businesses down within that radius. The contractor was subject to cleanup costs and business interruption expenses in excess of $1,000,000 
    • Overnight, vandals illegally entered a jobsite and accidentally released the contents of an above ground storage tank used to fuel equipment. The cost to clean-up the 500 gallon release was in excess of $80,000.
    • An excavation contractor was preparing a site for a new commercial structure. Over the weekend a major thunderstorm destroyed the storm water runoff control system, allowing sediment and fill materials to flow down grade through neighboring properties, roads, and into a nearby lake.  The contractor was responsible for cleanup costs and natural resource damages, which exceeded $2,000,000.  
    • An exaction contractor dropped a piece of heavy equipment 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.  
    • An excavation contractor hired a waste hauler to transport its used equipment oil and fluids. 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 carrier had to pay their apportionment of the remediation costs which totaled $450,000.     
    • 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 $320,000. 
    • An excavation contractor hauled clay from a jobsite that contained unknown contaminants. While transporting the clay, heavy rains started, which allowed the contaminants in the clay to escape from the truck. During the course of transporting the contaminants were found to have spread over a 35 mile route.  EPA fines and remediation expenses were in excess of $300,000. 
    • During the construction of a parking garage below the 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 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. 
    • An excavator was doing site grading of a former gas station.  During grading activities, the excavator spreads soil contaminated with chlorinated solvents from a previously unknown dry cleaner on site.  The grading activity spreads the once isolated contaminated soil over the entire site, thereby resulting in significant remediation costs.  Additionally, adjacent property owner files a claim for business interruption of ingress onto his property during the remediation activities.

    Overlooked Benefits of Environmental Liability Insurance

    Because environmental losses are a severity risk, rather than a frequency risk, the majority of Excavation Contractors lack the financial strength to self-insure their potential environmental liabilities. Since every Excavation Contractor has notable environmental exposures, consideration to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insuring. 

    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 often arise from an environmental 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 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 contractors 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 can 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.  

    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? 

  • Drywall 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 Drywall Contractors 

    May include, but are not limited to; vapor intrusion; lead; asbestos; mold; silica; PFAS chemicals;  impacting utilities while working at a property; no auditing of waste handling and disposal companies; transportation & storing of raw materials; adhesives and compounds used during installation; failure to effectively monitor and maintain safe working conditions; rehabilitation projects at older properties; nescience claims; failure to property identify hazards such as mold while working at a jobsite; 3rd party business interruption claims; natural resource damages, installing contaminated drywall….

    Environmental Claims Scenarios

    1. While working on a historical property, a drywall contractor used a hole saw to cut through a wall. 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 $40,000. 
    2. A drywall contractor was hired to install drywall at a property that had just been restored from flooding. A month after the job had been completed, mold was discovered between the walls where the drywall contractor had worked.  After further investigation, it was found that the mold was due to a failure made by the restoration contractor. The Drywall contractor was removed from the suit. However, they had already expensed over $25,000 in legal defense. 
    3. A drywall contractor working on a project to build a new multi-story building nicked a water pipe with a drywall screw while working on the 4th floor. This caused a slow leak behind the drywall that went down to the 1st floor resulting in mold growth throughout the floors below. The affected drywall was removed and replaced, and the mold remediated at a cost of $200,000.
    4. A residential construction company was sued when mold was discovered in multiple spec homes built by the contractor and its subs. Because it could not be determined which party was responsible, the general contractor and a number of its subs were all held liable and were ordered by a court of law to share in the mold remediation costs. 
    5. A child who lived in an apartment building constructed in the 1970s was diagnosed with lead poisoning. The renovation of the building by a drywall contractor allegedly caused unsafe conditions for the child, and the child’s parents filed a bodily injury claim against the drywall 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 drywall contractor wasn’t held liable. However, they had already spent over $35,000 in legal fees fighting the claim. 
    6. A drywall contractor unknowingly installed contaminated dry wall on numerous houses.  After a period of time, homeowners began to have breathing issues and metal piping was corroding.  Suits were filed against the general contractors along with the drywall contractor.  The accumulated suits caused for the drywall contractors bankruptcy.  

    Benefits of Environmental Liability Insurance 

    Unlike most liability exposures impacting Drywall Contractors, pollution losses are not a frequency risk, but rather a severity risk. Because all Drywall 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 often 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 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.     

    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.  

    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? 

  • Demolition 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 A&A Custom Crushing 

    Include, but are not limited to: puncturing unknown underground storage tanks or utilities; release of oils/fuels from equipment; PFAS; Silica; spills from mobile storage tanks; excavating through and/or spreading of unknown preexisting contaminated soil; using unknown contaminated material as fill; storm water runoff; puncturing unknown illegally buried drums or containers; lead; asbestos; silica; no auditing of waste handling and disposal companies; natural resource damages; vapor intrusion; storage and/or transportation of raw materials; business interruption expenses; leaks from hydraulic fluid; products pollution liability; raw materials stored and utilized in large quantities (i.e. acids, bases, compressed gases including cyanide and hydrogen chloride, diesel fuel and lubricant oils, flammable paints and solvents);  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; halon releases from fire suppression equipment; spills and leaks from the storage and handling  (loading/unloading) of material containers such as drums, totes or bags from vehicles and/or rail cars; improper characterization of hazardous waste…       

    Environmental Loss Examples

    1. A crushing contractor unknowingly spread petroleum-contaminated material across a project site during operations for a commercial development. 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. 
    2. A concrete demolition contractor ruptured a natural gas pipe while working on a job, which created a large high-pressure release. Due to safety concerns, local authorities evacuated a 2-block radius around the accident while it was being contained, shutting all businesses down within that radius. The contractor was subject to cleanup costs and business interruption expenses in excess of $1,000,000. 
    3. Overnight, vandals illegally entered a jobsite and accidentally released the contents of an above ground storage tank used to fuel equipment. The cost to clean-up the 500 gallon release was in excess of $80,000.
    4. A demolition contractors hydraulic hose on a crane broke which resulted in a pipe falling and hitting an above ground storage tank and cracking the secondary containment.  The contents were released and migrated into the ground and onto neighboring properties.  Cleanup along with legal fees and third party business interruption claims exceeded $2,000,000.  
    5. A demolition contractor had a 10,000-gallon diesel above ground storage tank on their premise to fuel their equipment.  The concrete secondary containment of the aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the ground and onto neighboring properties.  Total cost for investigation, removal, and disposal exceeded $320,000. 
    6. A concrete recycling contractor hauled material from a jobsite that contained unknown contaminants. While transporting the material, heavy rains started, which allowed the contaminants in the material to escape from the truck. During the course of transporting the contaminants were found to have spread over a 35 mile route.  EPA fines and remediation expenses were in excess of $300,000. 
    7. A concrete recycling contractor that was hauling material got into an accident and caught on 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 and claims from third parties for bodily injury and property damage due to exposure to toxic fumes exceeded $800,000. 

    Crushing and Project Waste Management companies generally lack the financial strength to self-insure their environmental liabilities.  Since this insured has a number of environmental exposures, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of their 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.      

  • 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. 

  • 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.