Tag: Contractors

  • 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? 

  • Residential 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 Residential Contractors 

    Include, but are not limited to:  storm water runoff;  vapor intrusion;  impacting underground storage tanks; completed operations exposures including incomplete line hookup or improper system construction causing spills or emissions;  fumes, emissions, or spills of chemicals used during construction (finishers, sealants, adhesives, solvents, curing compounds);  improper handling and disposal of CCA Treated lumber;  HVAC causing build up or release of airborne bacteria;  mold resulting from water intrusion or moisture encapsulation;  spills from mobile storage tanks;  release of oils/fuels as a result of vandalism;  site preparation/excavation work through preexisting contaminated soil or impacting utilities;  lead paint; illegal disposal of waste in unsecured roll of boxes;  unknowingly using contaminated soil as fill;  spills and releases from application of asphalt, asbestos; silica  and more… 

    Environmental Claim Scenarios

    1. An excavation contractor was preparing a site for a new residential home. During the weekend, heavy rains caused the site containment barriers to fail, allowing fill material to flow into a nearby stream. Cost to remediate the stream, and natural resource damages exceeded $100,000. 
    2.  A remodeling contractor was reconditioning a tile floor in a home undergoing extensive renovation.  The workers inhaled toxic vapors from the sealants used in the reconditioning process. Several subcontracted workers in the building filed bodily injury claims totaling $175,000 against the contractor. 
    3. A residential construction company was sued when mold was discovered in multiple spec homes built by the contractor and its subs.  The general contractor was ordered by a court of law to pay mold remediation costs in excess of $100,000. The contractor also had legal fees of $35,000.   
    4. When putting in a foundation, a concrete contractor ruptured an unmarked natural gas line and had to pay cleanup costs exceeding $100,000. 
    5. A residential plumber was called in to do a simple repair on a third floor of a residential property. The contractor replaced the leaky flush valve and left the job. As this was a second home, it was several weeks before anyone noticed the water running out of the back door. When the owners got to the house, they found mold growing throughout the first and second floors, hanging in some places like Spanish Moss. The entire house had to be gutted and refinished, costing the contractor well over $600,000. 
    6. A drywall contractor was hanging new drywall at a home when an employee accidentally drilled through a small water pipe located behind the wall. The drywall contractor did not realize the leak occurred and a substantial amount of mold grew between the walls before anyone noticed. The drywall 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.  
    7. A residential septic contractor was subject to defense costs exceeding $25,000, in addition to property damage and bodily injury claims exceeding $400,000 from a residential community.  During sewage installation, a subcontractor improperly tied in piping. This caused raw sewage to migrate into the underlying groundwater and contaminate residential wells.  
    8. During renovation, a HVAC contractor removed ductwork from a home’s HVAC system. It was later determined that the ductwork was home to a dangerous mold. The dismantling activities and the on-site storage of the ductwork caused the mold to spread in the air throughout the home. Other contractors working on the property became sick from the mold; some were even critically injured. The contractor was found liable for the spread to the mold and faced bodily injury and property damage claims in excess of $1 million.  
    9. A glass contractor installed new windows at a residential property that had been damaged by a recent storm. 6-months after the job was completed mold was discovered in the home. 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.  
    10. While working on a residential property, an electrical 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.   
    11. A landscaper was applying fertilizers and pesticides at a job site when a nearby neighbor complained of being impacted by a chemical drift. The neighbor filed a lawsuit claiming bodily injury as a result of over application and neglect on the part of the landscaper. Because he had no CPL coverage in place, the landscaper had to expense $40,000 in legal defense costs, even though he was ultimately released from the suit. 
    12. An asphalt paving contractor had a piece of equipment puncture a hole in the side of their liquid asphalt truck on a job site.  More than 800 gallons of liquid asphalt was spilled before they were able to contain the release. Clean up costs and business interruption was in excess of $150,000.  
    13. A residential contractor renovated the interior of a residential house built in the 1950s.  The renovation involved paint removal from interior walls, window trim and door jambs.  During the course of renovation, the contractor used a plastic barrier to seal the areas where he was working.  The homeowners continued to occupy the house during renovations.  Additionally, the wife was six months pregnant.  Renovation was finished prior to the birth of the baby; however, upon birth, the child tested positive for blood lead poisoning.  After investigating the source of the lead, the couple sued the contractor for bodily injury as well as potential loss of future wage potential (due to a possible decreased IQ level for the baby) in the amount of $500,000.

    Benefits of Environmental Liability Insurance

    Because environmental losses are a severity risk, rather than a frequency risk, most General Contractors lack the financial strength to self-insure their potential environmental liabilities. Since every General 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 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 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.  

    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.    

    Premise Pollution Liability (PPL) 

    PPL 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, 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. 

  • Pressure Cleaning 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 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 most contractors exposed to potentially uncovered claims. What pollutants are impacting your business?

    Environmental Exposures Impacting Pressure Cleaning Contractors  

    May include, but are not limited to: Mold;  Silica;  Asbestos;  Lead;  Spills during the loading, unloading, and transportation of cargo;  Damaging fuel tanks, hydraulic fluid lines, boilers, utilities, or other raw materials stored at customer locations;  Cleaning vehicles that contain unknown pollutants such as lubricants, which spread due to power washing;  Water run-off from jobsites;  Faulty hose hook-up and/or pump failures;  Natural resource damages;  Accidentally using contaminated water;  Vandalism;  3rd party business interruption;  Odor drifting; Vapor intrusion;  Illegal disposal of waste by 3rd parties;  Non-owned disposal site liability;  Pollution events impacting your operating facility;  Containment system failures;  Legal defense for 3rd party nuisance claims;  failure to identify or mischaracterize contamination during surveys;  exacerbation of preexisting contamination during cleanup efforts;  failure to notify public and/or EPA of contamination or releases;  hazardous air emission from incomplete abatement;  and more…

    Environmental Claim Scenarios

    1. A power washing company was sued when mold was discovered within a building they had recently worked at. The contractor was responsible remediation, 3rd party bodily injury and property damage, as well as 3rd party business interruption, as the customer had to suspend operations while the mold was being remediated. Total cost of the claim exceeded $600,000. 
    2. An emergency clean-up contractor was performing power washing services at a petroleum spill site. While working, the contractor’s containment system failed, allowing the petroleum to rush onto a neighboring property (which included a wetland). Total cost of remediation, 3rd party property damage, and natural resource damages exceeded $350,000. 
    3. A contractor used high pressure cleaning equipment to clean a building’s HVAC system. It was later found that the ductwork was home to a dangerous fungus, which spread throughout the building during the cleaning. A number of employees in the building became infected with the fungus. Some of which were critically infected. The contractor was found liable for the spread of the fungus and faced bodily injury and property damage claims in excess of $1 million.
    4. 6-months after completing a cleaning job, the customer discovered mold in their building. The customer sued the cleaning contractor for the cost of remediation. After further investigation, it was determined that the cleaning contractor was not responsible for the mold, and was removed from the suit. However, the contractor had already expensed over $20,000 in legal fees. 
    5. While cleaning above ground storage tanks, the cleaning contractor accidentally impacted a valve, which caused fuel to escape the tank and into the soil. Cost to remediate the contamination was over $75,000. 
    6. A power washing contractor was transporting equipment and materials to a jobsite and got into an accident, which caused fuel being hauled for the power washers to spill into the surrounding soils. Claims for investigation, remediation, and natural resource damages were in excess of $50,000. 
    7. While cleaning a commercial kitchen, the contractor unknowingly sprayed areas coated with lead based paint. Lucky for the contractor, the exacerbation of the lead based paint was discovered shortly thereafter. However, the total cost to remediate the lead paint was $25,000.  

    Benefits of Environmental Liability Insurance

    Because environmental losses are a severity risk, rather than a frequency risk, the majority of power washing contractors lack the financial strength to self-insure their potential environmental liabilities. Since every power washing 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.

    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.

    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, 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 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?

    Transportation Pollution Liability 

    Generally, Business Auto policies will exclude pollution losses arising from spills or other releases of their cargo. Transportation pollution liability affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and over turn of transported cargo.  Make sure you do not confuse the MCS-90 endorsement as being transportation pollution liability coverage, it is not, and the insurance carrier reserves the right to subrogate back against the insured for cost to clean up a release of the transported cargo.  

    Environmental Impairment Liability (EIL) 

    The pollution exposures impacting your contracting work in the field are well documented, but have you considered the pollution risks impacting your owned, rented or leased operating locations? Many contractors have physical locations that support their work in the field, which can include offices, storage buildings, equipment/vehicle maintenance facilities, bulk fuel storage, outdoor storage yards, raw materials, etc. 

    Environmental Impairment Liability (EIL) is for contractors that are susceptible to economic loss caused by pollution that actually or allegedly originated from their property.  Sometimes referred to as Pollution Legal Liability (PLL), this coverage is for contractors 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 cleanup costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multiyear terms.  Most EIL policies cover above ground storage tanks.

    Professional Liability 

    Professional exposures are generally excluded from General Liability and Contractors Pollution Liability policies. In the course of their normal operations, contractors face all types of professional exposures. They may make slight adjustments on plans, 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? 

  • Landscapers

    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 Landscapers  

    May include, but are not limited to: Storage, transportation, improper or over application, and disposal of fertilizers, pesticides, and herbicides; storage and transportation of fuels, antifreeze, oil and hydraulic fluids;  leaking above and/or underground storage tanks;  air emissions from chemical applications; storm water runoff; vapor intrusion; spills from loading and unloading of chemicals, fuels, and supplies; overuse of irrigation or improper irrigation installation; on-site and off-site disposal of trash, garbage and other waste materials; equipment storage areas; historical contamination;  natural resource damages; improper management of protected or sensitive areas like wetlands;  vandalism; mold resulting from water intrusion or moisture encapsulation;  spills from mobile storage tanks;  release of oils/fuels as a result of vandalism; unknowingly using contaminated soil as fill;  site preparation/excavation work through preexisting contaminated soil or impacting utilities; adverse reactions and interactions of chemical compounds that accidentally commingle during a fire; siltation of streams from improper erosion control management ….

    Environmental Claim Scenarios

    1. A landscaper used treated waste water as a source for irrigation.  The waste water treatment plant did not comply with permitting regulations nor was the wastewater tested prior to releasing it to the commercial landscaper.  After several months of irrigation, heavy metals and high counts of fecal coliform were found in the soils.  The landscaper was required to pay remediation costs in excess of $265,000.
    2. A landscaper was applying fertilizers and pesticides at a job site when a nearby neighbor complained of being impacted by a chemical drift. The neighbor filed a lawsuit claiming bodily injury as a result of over application and neglect on the part of the landscaper. Because he had no CPL coverage in place, the landscaper had to expense $40,000 in legal defense costs, & was ultimately released from the suit. 
    3. A landscaper doing a large project adjacent to a small wetland and stream was fined $30,000 by the EPA and had to pay remediation costs of $150,000 for storm water runoff and stream siltation that caused environmental resource damage. The landscaper had not properly managed the grading and erosion from the property into the stream and this resulted in storm water runoff containing fertilizers, herbicides, soils, and other materials which killed of wildlife in the stream.
    4. A landscaper stored gasoline in steel underground storage tanks (UST’s) for use in tractors, lawn mowers, trucks, and other equipment. Tank corrosion led to a discharge of petroleum products, which contaminated the surrounding soil and groundwater. Remediation expenses incurred for the investigation and cleanup of the site amounted to $350,000. 
    5. A residential community received its water supply from groundwater wells. Over time, the application of herbicides, pesticides, fertilizers, and other chemicals by the landscaper for the community caused groundwater contamination. Bodily injury claims were filed by local residents for perceived injuries from drinking contaminated water. Property damage claims were filed because the groundwater system was no longer a suitable drinking source. Total claims exceeded $700,000.

    Benefits of Environmental Liability Insurance

    Because environmental losses are a severity risk, rather than a frequency risk, the majority of landscape contractors lack the financial strength to self-insure their potential environmental liabilities. Since every landscaping business 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 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, 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.  Do your subs/vendors have CPL insurance if they cause an environmental loss?

    Transportation Pollution Liability 

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

    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 

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

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

    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? 

  • Environmental 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 Environmental Contractors

    Asbestos/Lead/Mold Consultants

    Failure to identify or mischaracterize contamination during surveys; faulty design of remedial action and management plans causing bodily injury; diagnostic laboratory errors; hazardous air emission from incomplete abatement; inaccurate post-abatement certification…. 

    Drilling/Geotechnical Contractors

    Drilling through and spreading of unknown preexisting contaminated soil; impacting groundwater from soil boring and monitoring well installation work (i.e. cross contamination of aquifers, etc.); impacting underground utility lines and other underground structures…. 

    Ecological Consultants

    Incorrect identification/delineation of wetlands, forest and other government-regulated areas; improper selection and usage of pesticides and herbicides; improper design of irrigation systems…. 

    Environmental Engineers and Consultants

    failure to identify contamination during site assessment/audits;  impacting underground structures from subsurface investigation activities; cross contamination of aquifers due to improper well design, improper selection of materials and equipment leading to remedial system failure;  improper installation and permitting of remedial systems leading to hazardous waste releases; failure to notify public and/or EPA of contamination or releases; failure to effectively monitor and maintain safe working conditions; CERCLA liability due to O&M activities at Superfund sites and from waste disposal site selection; vicarious liability due to use of subcontractors and sub-consultants…. 

    Geotechnical Engineers 

    Impacting of underground structures and groundwater from subsurface investigations; inaccurate foundation design and structural damage from settling due to varying soil conditions; inaccurate lab results due to faulty sampling or field testing techniques; construction delays and cost overruns due to differing site conditions…. 

    Laboratories

    Failure to detect contaminants due to inaccurate data interpretation; inadequate or improper storage of samples; performance of inappropriate/incorrect tests or analytical methods; lack of adherence to QA/QC procedures; improper sample preparation; exceeding sample holding times, lab equipment not properly calibrated…. 

    Remedial Action Contractors 

    Impacting underground utilities and other underground structures leading to collapse and/or explosion; exacerbation of preexisting contamination during excavation and cleanup efforts; air emissions and spills resulting from handling of hazardous substances; inadvertent mixing of incompatible wastes; release of oils/fuels from equipment leaks and vandalism; trench collapse due to improper shoring; completed operations exposures due to incomplete or improper line hookup and remedial system construction….

    Some additional environmental issues include; Inadequate procedures to ensure incompatible wastes are properly segregated and maintained in separate areas; Storing and stacking 55-gallon drums of hazardous wastes at multiple locations around the facility in uncontained areas over soils and/or near water; Lack of secondary containment around aboveground tanks; Storm water runoff; Releases to on-site soils, and on-site surface impoundments or landfills….

    Environmental Claim Scenarios

    1. A developer retained a consultant to perform a geologic/geotechnical investigation for a residential subdivision. During final grading on the site, a major landslide occurred which extended off-site and impacted adjacent properties. The developer filed suit against the consultant for breach of contract and negligence in failing to provide proper design engineering services during excavation of a sloped area. The resulting settlement totaled $300,000. 
    2. A developer hired a consultant to perform a subsurface geotechnical engineering investigation to determine the type of foundation necessary to support a proposed hotel. The geotechnical report included conclusions about the subsurface soil composition and a design recommendation for a shallow footing foundation. The report also included a disclaimer, which indicated the possibility that conditions between soil borings would differ from those actually sampled. During construction of the hotels foundation, the developer had to change the type of foundation that was originally proposed due to organic materials. Despite the disclaimer, the developer brought a suit against the consultant for over $500,000 for professional negligence, increased construction cost, lost profits and delayed opening and interest incurred on his loan for the hotel. 
    3. A consultant hired a driller to perform sampling of subsurface soils. The consultant directed the driller to drill and draw a sample. The driller accidentally advanced through a UST. Both the consultant and driller were sued for $140,000 in damages, including UST repair and soil remediation. 
    4. A consultant provided plans and specification for the installation of monitoring wells at a contaminated facility. Contamination had seeped from the ground surface into a shallow aquifer. Following installation of monitoring wells, sampling showed evidence of contamination in both the shallow aquifer and in lower lying aquifer. The facility owner filed a claim against the consultant, alleging that well placement (location and depth) was responsible for the cross-contamination of the lower lying aquifer. The settlement amounted to $250,000. 
    5. The Department of Energy (DOE) hired several environmental contractors to assist in operation one of its facilities. Following an accidental release of air pollutants, local residents filed a class action nuisance suit against the contractors, alleging emotional distress and diminished property value. The case was settled in the resident’s favor, for which an $80 million trust fund was established. Both the government and the contractors were required to contribute to the fund. 
    6. During remedial activities at a Superfund Landfill site, a remedial action contractor (RAC) inadvertently crushed several drums that were improperly classified as empty. As a result, several gallons of hazardous contents were released, causing localized soil contamination. The RAC failed to notify the EPA of the release, which resulted in both criminal and civil actions against the contractor. The RAC was held liable under CERCLA and was required to pay penalties exceeding $6.1 million. 
    7. A consultant failed to delineate wetlands on property, which was to be developed into a new regional landfill. As a result, the landfill had to be re-engineered, thus delaying its opening. The settlement amounted to $7 million. 
    8. A remediation contractor excavated a small underground diesel tank near a distribution warehouse and noted that stained soil surrounded the tank. The project manager advised the firm to continue excavating around the tank, which pulled up contaminated soil. Because of the foundations proximity to the distribution center, the excavation of contaminated material without proper shoring equipment caused the building’s wall to collapse. The distribution center’s walls and roof also collapsed. Reconstruction costs, business interruption, lost profits and additional remediation expenses totaled $1.2 million. 
    9. An environmental consultant performed a phase I site assessment at a site that had been previously used for industrial purposes.  The consultant submitted a report saying the negligible contamination had been found.  The property was subsequently sold.  During excavation an unregistered underground storage tank was discovered on the site that had been leaking.  The property developer sued the consultant for $1.2 million for remediation expenses, lost profits, and diminution in value.
    10. A consultant performed a modified Phase I assessment on a property being considered for purchase and determined that is had minor groundwater contamination.  During construction of the newly purchased property, the site contractor discovered extensive contamination that resulted in significant remediation costs.  The consultant was sued for over $1 million.
    1. A contractor was subject to cleanup costs after vandals opened an onsite mobile refueling tank causing diesel fuel to be released onto virgin soil.

    Overlooked Benefits of Environmental Liability Insurance

    Because environmental losses are a severity risk, rather than a frequency risk, the majority of environmental contractors lack the financial strength to self-insure their potential environmental liabilities. Since every environmental 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. 

    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 Coverages for Environmental Contractors

    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, 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.     

    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?

    Professional Liability 

    The absolute pollution exclusion in a standard commercial general liability policy excludes sudden and accidental, and gradual pollution losses due to the release of “solid, liquid, gaseous, or thermal irritants or contaminants, including smoke, vapor, soot, fumes, acid, alkalis, chemicals and waste”….  Engineering firms who work in solving environmental exposures faced by their clients need to have coverage for negligent acts, errors or omissions that may result in damages caused by pollution conditions. 

    There are various ways coverage can be written to protect the engineering firm and their clients. Professional liability on a standalone basis or professional liability including general liability (GL) is available. For engineering firms that may also get involved in doing hands on work at the job site, they can add to the coverage contractors pollution liability (CPL) insurance, (refer to contractors pollution liability insurance for more details). Coverage for the professional liability is done on a claims made basis. For the GL and CPL, coverage can be on a claims made or occurrence form basis. 

    You have to also keep in mind there are contractors that in the performance of their work may act in a consultants or engineers capacity. You need to make sure you offer your client the broadest program available to meet their needs. By combining the coverage’s under one contract you are eliminating potential gaps in coverage.  Coverage can be purchased on a job specific basis or to cover all the work performed by your client on an annual basis. 

    Coverage applies specifically to services / operations identified under the policies declaration page.   

    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 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 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.  

    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.      

  • Directional Drilling 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. What pollutants are impacting your business?

    Environmental Exposures Impacting Directional Drilling Contractors   

    Storm water runoff;  completed operations exposures including incomplete line hookup or improper system construction causing spills or emissions;  lubricant oils and other fluids from field equipment;  release of oils / fuels as a result of vandalism;  site preparation / excavation work through preexisting unknown contaminated soil;  air emissions from Silica, dust and debris; impacting abandoned underground storage tank; 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;   releases from portable storage tanks;  natural resource damages;  vapor intrusion, PFAS chemicals…. 

    Environmental Loss Examples

    1. While putting in a pilot hole for new utilities in a commercial area, a directional drilling contractor ruptured an unmarked natural gas line. Before the gas line was shut off, hundreds of gallons were released into the soil. Due to safety concerns, local authorities ordered the evacuation within a 2-block radius, which interrupted the operations of nearby businesses. As a result of the accident, 3rd party business interruption claims totaled over $400,000, remediation expenses totaled roughly $100,000, and the contractor experienced additional losses due to project delays.  
    2. A municipality hired a directional drilling contractor to assist in the installation of a new network of data and voice cables. The job included horizontal drilling under several roads. While drilling, the contractor hit a fuel line and did not report it. More than two years later nearby residents began to smell gas in their well water. During investigation, the damaged fuel line was discovered and was determined to be the source of contamination. The local municipality filed suit against the contractor for 3rd party claims and cleanup expenses totaling over $2.7 million. The insured also accumulated additional legal expenses and was eventually forced out of business due to the loss. 
    3. The concrete secondary containment of a 5,000-gallon gasoline aboveground storage tank located at a drilling contractor’s main office and yard was cracked when it was struck by a piece of equipment.  The incident was not reported and at a later date, a release from the tank spilled 3,000 gallons into the containment. The gasoline seeped into the underlying soils and required costly excavation and removal. The total cost for investigation and remediation exceeded $180,000.  
    4. A directional drilling contractor was drilling a new utility channel. The drill passed through and exacerbated a preexisting-unknown pollution condition that had been contained by the clay. The drill allowed contaminants to spread into the surrounding soils. Remediation expenses totaled over $150,000.
    5. 6-months after completing the drilling and installation of a pipe carrying natural gas, pressure in the pipe began to decline. After further inspection, it was found that a leak in the pipe was allowing natural gas to spread into the surrounding soils. The owner of the property filed suit against both the general contractor and the drilling contractor. Even though the drilling contractor was not held liable for the loss, they still accumulated over $50,000 in legal expenses fighting the claim.  
    6. A trenchless boring contractor was installing a new pipe through a layer of clay that contained unknown contaminants. While the clay was staged on the job site, heavy rains started, which allowed the contaminants in the clay to migrate offsite.  EPA fines and remediation expenses were in excess of $250,000. 
    7. A drilling contractor caused a release of raw sewage in both soil and groundwater after failing to identify a sewer line before drilling.  The cleanup entailed the excavation of several tons of soil ad caused nearby businesses to be shut down for a few days when their basements filled with raw sewage.  Substantial claims were filed for business interruption and cleanup costs.

    Overlooked Benefits of Environmental Liability Insurance

    Because environmental losses are a severity risk, rather than a frequency risk, the majority of directional drilling contractors lack the financial strength to self-insure their potential environmental liabilities. Since every directional drilling 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 the clean-up costs are far less than other costs that often arise from the loss. 

    Overlooked 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 create an environmental loss.

    Environmental Liability Insurance Coverages

    Contractors Pollution Liability (CPL)

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

    Transportation Pollution Liability 

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of their 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 and Above Ground 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 system.  

    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. 

  • Contractors Pollution / Professional

    Terms

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

    Professional Liability Coverages

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

    Pollution Liability Coverages

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

    Claim Scenarios

    Contractor’s Professional Liability 

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

    Contractor’s Professional Rectification / Mitigation Coverage 

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

    Contractor’s Professional Indemnity / Protective 

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

    Contractors Pollution Liability (Jobsite) 

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

    Transportation Pollution Liability (TPL) 

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

    Premises Pollution Liability (Contractor Operating Facilities)

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

    Legal Defense 

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

  • Pollution Exposures Impacting Contractor Operating Facilities

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

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

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

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

    Environmental Loss Examples 

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

    Insurance Product Solution

    Environmental Impairment Liability (EIL) 

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

    EIL Policies Can Provide Coverage for 

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

    Policy Terms, Limits, & Premiums

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

  • Concrete Suppliers

    What is a Pollutant? 

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

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

    Environmental Exposures Impacting Concrete Suppliers

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

    Environmental Claim Scenarios

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

    Overlooked Benefits of Environmental Liability Insurance

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

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

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

    Environmental Liability Insurance Coverages

    Premise Pollution Liability (PPL) 

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

    Transportation Pollution Liability

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

    Contractors Pollution Liability (CPL)

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

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

    Underground Storage Tanks

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

    Property Transfer Liability 

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

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

  • Concrete Additive Contractors & Manufacturers

    What is a Pollutant? 

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

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

    Potential Environmental Exposures

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

    Environmental Claim Examples 

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

    Overlooked Benefits of Environmental Liability Insurance 

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

    Three Overlooked Benefits

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

    Environmental Liability Insurance Products 

    Contractors Pollution Liability (CPL)

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

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

    Environmental Impairment Liability (EIL) 

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

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

    Transportation Pollution Liability

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