What Is Pollution Liability Insurance and Why Should I Have It?
Pollution-caused losses can be a major hit to any business, but most general liability insurance policies exclude pollution-related claims. This is why it is especially important for businesses to ensure they have Pollution Liability coverage, particularly those in waste and recycling management. It is designed to address damage claims and suits involving pollution supposedly caused by a business or person. But how do you know if your business needs Pollution Liability Insurance?
The basics of Pollution Liability
Pollution Liability covers your business in pollution-related incidents for both losses to your business and/or losses to others as a result of your business. It specifically covers the costs of pollution-related clean-up, as well as liability claims related to injury or death.
What are pollution-caused losses?
You may be surprised by the number of possible pollutants that may result in loss or damages to your business. In fact, many claims that insurance companies classify as pollution-related are ones that you may think would be covered under general liability. So it’s particularly important to be clear on your policies if you work with any of the following:
- Waste disposal, both hazardous or non-hazardous waste
- Waste bin management
- Toxic mould, fungus or other bacterial contamination
- Recycling materials
- Silt runoff from construction sites into public water sources (liability for both contractor and property owner)
- Certain green construction techniques that can cause unforeseen pollutants
- Lead-based paint
- Any contaminants or chemicals that could be released into the air or public water supply (this list could be endless, including solvents, degreasers, paints, cleaning products, fuels, pesticides, herbicides, etc.)
- Aboveground or underground storage tanks
- Building or car exhaust/fumes
Damage or loss as a result of any of these and other materials or services may be classified as pollution-caused and require coverage beyond general liability.
What does pollution liability cover?
As with most coverage, there are specific coverages for Pollution Liability Insurance that any business needs to be aware of. The first is Premises Pollution Liability, which covers claims linked to pollution released at, on, or emanating from one specific, covered location. Then there is Contractors Pollution Liability that covers bodily injury, property damage and remediation costs for which a contractor who causes a pollution condition is liable. Finally, there’s Errors and Omissions Liability, which covers losses as a result of wrongful acts performed in the providing of professional services.
Do I need it?
If your business is at risk of any pollution-caused loss, you may want to consider adding on Pollution Liability coverage to your insurance policy. This is especially true if your business is large enough to have a risk manager. While organizations that handle large quantities of hazardous materials, such as waste haulers, face greater risk of needing Pollution Liability Insurance, smaller businesses, such as maintenance shops or even hair salons, may also want to look at coverage options.
This becomes especially true as environmental concerns become more prevalent alongside an expanding list of known pollutants. Some theorize the increased focus on the environment and further knowledge on pollutants have led to more costly lawsuits which companies hadn’t previously faced. Because of the unknown nature of many environmental concerns, a pollution-related claim can surprise almost any business and come at a high price. Speak with your insurance broker today to find out what pollution-related coverage will best protect your business.