Here’s a phrase you never want to hear your broker say “I’m sorry to inform you but you aren’t covered for that under your general liability policy.” But more often than not, when you have a environmental incident or pollution liability situation. This situation becomes all too common for unsuspecting business owners who were uninformed about this exposure.
All businesses face an environmental exposure and should not only understand their liability, but should obtain a policy that transfers that risk onto a third party. Site Pollution Liability (Environmental Impairment Liability) insurance is used to cover bodily injury, property damage, clean-up costs, and defense costs associated with contamination and pollutants for a insured’s owned or permanently leased property. There is also coverage for exposure due to the nature of your operations (such as manufacturers, schools, and contractors. Business owners that rely solely on their general liability policies to cover them would end up facing a devastating loss without coverage.
Claim Examples:
Operations: While developing and constructing a new residential community, Rono Construction & Development neglected to use proper techniques to manage runoff. soil erosion and excess runoff from a job site became to be the cause of contamination a nearby lake after multiple children complain of sickness and are rushed to the ER. Angry parents congregate then sue the developer and general contractor claiming they violated of the Clean Water Act.
Property: LATHAM Road LLC was in escrow to sell their property to a new owner. The property had high levels of Asbestos that developed in the 90’s before LATHAM Road was the owner and was never detected. The EPA mandated that LATHAM road clean up the pollution before the sale is finalized. The total cost of the cleanup was $678,234.12.
As levels of acceptable contamination can rapidly alter depending on the government and current events it’s more important than ever. As long as the exposure is defined as a pollution condition by the federal, state, or local government, you need to have a policy in place that has you covered.