Every successful construction project requires careful planning and management, and that includes environmental risk management. Pollution incidents don’t happen all that often, but when they do, they’re usually costly, with project delays, cleanup and remediation costs, fines, legal costs, and reputational damage.
Almost every type of contractor has exposure to pollution risks. You could be exposed to liability for substances you bring to the jobsite, or there could be contaminants already at the site. Some of your subcontractors could also have greater environmental exposures simply due to the quality of their work. Even defective workmanship can create liabilities related to environmental pollution, hazardous waste, toxic waste, mold, and other pollution-related risks.
With so many ways to get caught up in a pollution claim, it’s crucial to pinpoint your exposures and take measures to protect yourself.
The first step in managing your environmental risks is to identify them – and you need to consider every potential exposure, inside and out. Indoor hazards can include asbestos, lead, and mercury common in older buildings, and indoor air quality issues such as mold. Outdoor hazards can include utility lines, underground storage tanks, and contaminated soil. Then there are the potential hidden exposures such as an unknown and contaminated dredge disposal site.
Do you have adequate protection for your exposures?
If you’re not carrying Contractors Pollution Liability (CPL) coverage, you might want to rethink that decision. Every contractor knows that a standard General Liability (GL) policy has an absolute pollution exclusion. Even if the policy provides some coverage, it likely won’t cover cleanup, which is usually the biggest share of pollution claim costs.
Unfortunately, many contractors don’t understand the significance of the pollution exclusion. Some only get CPL coverage if the written contract requires it, not understanding that their day-to-day operations could easily expose them to a pollution incident that’s not covered by their CGL policy.
That means many contractors are operating with a dangerous gap in their liability coverage.
Contractors Pollution Liability insurance fills that gap by providing coverage for a wide range of pollution risks associated with construction projects. CPL generally covers third-party claims for bodily injury and/or property damage, and remediation costs for pollution incidents resulting from a contractor’s operations. It also protects contractors for work performed by subcontractors on their behalf, and can also cover non-owned disposal sites and transportation exposures.
Who needs CPL coverage?
You probably need this coverage if you work in any of these areas:
- Road construction
- Sewer, waste and utility
- Electrical, HVAC, and mechanical
- Industrial and pipeline
- Above/below ground storage tanks
- Grading, site and excavation
- Abatement and remediation
You can’t eliminate every possible exposure, but you can reduce many of them by taking adequate environmental precautions, and you can be prepared for any surprises by carrying the right insurance coverage.
Don’t get blindsided by a pollution claim. Talk to the construction insurance experts at Heffernan Insurance Brokers about a custom insurance program that will protect your projects – and your profits – from these unexpected surprises.