Pollution Liability

Pollution Liability or sometimes referred to as Contractors Pollution Liability (CPL) is an insurance policy that specifically handles the costs associated with pollution clean-up as well as liability claims related to bodily injury or property damage from a pollutant. Oftentimes, businesses think that a General Liability insurance policy will cover them for many things that are excluded from a Commercial General Liability policy. There are many reasons why any business needs a CPL policy. All businesses and property owners are exposed to being liability for pollution through joint & several liability. Whether you were responsible for it not, if you own a property or have a business, you have a liability exposure to pollution.

Examples include (but not limited to):

  • Fuel from a company vehicle spilled during an accident
  • Soot from a restaurant is considered a pollutant
  • Mold due to negligence by your worker or subcontractor
  • Accidental disruption of utilities that unintentionally causes a pollutant to spread
  • Vandalism or theft that inadvertently releases pollutants such as gasoline, lacquer, paints, and stains
  • Improper architecture drawings that cause your workers or subcontractors to create a situation that releases pollutants such as hitting plumbing or electrical lines
  • Removal, replacement, or storage of insulated items that contain asbestos and cause it to be airborne
  • Accidental overspray of hazardous polymers that damage vehicles and vegetation

As you can see, there are many things that can happen during normal business operations that cause pollutants to spread. Whether the cause is by your employers or subcontractors, ultimately it is your company that is responsible.

Long Term

Long term pollution insurance covers pollution issues that occur gradually over an extended period of time. Some types of businesses that should consider long term pollution liability insurance are gas stations, auto repair and body shops, factories, and retail establishments that sell any item that could release pollutants into the air.

Sudden and Accidental

Sudden and accidental pollution liability policies cover issues that happen suddenly, such as an explosion, or over a brief period of time, such as a water tank breaking down. Accidental pollution insurance policies are the type of pollution insurance policy most businesses need to protect their business.

Claims made vs Occurrence

In addition to deciding on whether or not your business needs a long term or sudden pollution liability policy, you also need to decide which method of reporting your company should use. The main difference is how coverage is determined based on the event that occured. This is called the “coverage trigger.” With occurrence, coverage is triggered on the date of the event causing the loss whereas claims made is triggered when you first become aware and notify the insurer of the claim or potential claim. Both kinds of policies have their advantages and disadvantages.