Anyone who is in the contracting business or even works with contractors should consider pollution liability as a protection when dealing with potentially harmful on-site utilities, such as sewer or water lines for instance. Those who handle hazardous substances face unique liability risks, as their work may easily contaminate properties or expel toxic chemicals into the air or ground water. Pollution-related incidents are not covered under general liability policies. Typically, you are only able to cover all of the company’s operations or project-specific coverage for a limited period of time.
Common Policy Exclusions
Pollution Liability coverage is limited by the terms of the policy. There may be a per person limit and an aggregate limit for the entire incident.
It is important that policy details are understood regarding all hazards that may be present at the job site. Some policies exclude common hazards such as asbestos, lead, mold, and pre-existing pollution on the site. If you’re working with a particular excluded hazard, inquire about purchasing additional coverage. Depending on your unique risks, consider a rider that includes coverage for a specific known hazards.
Confusion Surrounding “Hazardous Waste”
Do not assume that pollution exclusions only apply to hazardous waste, as handling the following will need specially modified environmental insurance to fill the coverage gaps for pollution, fungi, mold, bacteria, asbestos, silica, and lead in property and liability insurance policies:
- Any material that can be considered a contaminant.
- There is property, people, or animals that may be exposed to contamination.
- There is potential for a water intrusion event or associated issues within a building.
- The insured owns or works at a waste treatment and disposal site.
Confusion Surrounding What Is a “Pollutant”
Traditional definitions of excluded “pollutants” depend on state law and it is often on the subject of whether bacteria is a “pollutant” or not. It can also depend on whether insurers deny a bacteria-related loss and are willing to go to court to let a judge figure out if bacteria is a “pollutant” or not.
Fungi/bacteria and pollution exclusions in liability insurance policies is a very common concern for many businesses in an industry that may be affected. It is crucial that you discuss your specific liability risk with your insurer so you understand the strengths and weaknesses of pollution liability insurance and you have the opportunity to secure proper coverage for your business.
About Bozzuto & Co. Insurance Services, Inc.
Bozzuto & Company Insurance Services has provided business and personal insurance solutions to clients throughout California since its founding in 1981. Our experienced staff understands the unique needs that each person has when insuring their lives and their businesses, and we pride ourselves on our deeply personal customer service. We are happy to help you through every step of the insurance selection process. Contact us today at (800) 400-6394 to learn more about what we can do for you.