Pollution/ Environmental Liability

Virtually all liability polices include limitations and exclusions for pollution/environmental related occurrences. To cover these pollution exposures, insurers have developed various types of environmental insurance. The need for loss control and risk transfer via pollution/environmental insurance has become an integral part of many business owners’ insurance portfolios. Core protection for any business directly or indirectly susceptible to any pollution loss begins with a full assessment of potential exposures. Eight (8) major types of environmental insurance policies include:   

  • Site Specific Environmental Impairment Liability (EIL) Policies: Provides third party liability coverage for bodily injury, property damage, clean up and defense costs for pollution escaping beyond the borders of a specified site.
  • Contractors EIL Policies: Coverage for contractors performing environmental mediation services on contaminated sites. Provides coverage for claims arising out of a pollution incident for bodily injury, property damage, clean up costs, and defense expenses./li>
  • Environmental Professional (E & O) Liability Policies: Provides professional liability for environmental engineers and consultants from negligent professional errors, acts, or omissions. Coverage against claims may include allegations of failure to identify contaminants, faulty remediation design of a contaminated facility or errors in analysis of samples to name a few.
  • Asbestos and Lead Abatement Contractors’ General Liability Policies: Provides coverage against bodily injury, property damage, clean up and defense costs associated with operations involving asbestos and lead abatement of customers’ properties.
  • Environmental Mediation Policies: Provides first party coverage (i.e. the owner of the property) for remediation costs or expenses caused by environmental damage at a covered location.
  • Remediation Stop Loss Policies: Insures against remediation costs that exceed the projected costs regarding an environmental clean up of a specific location. Remediation stop loss coverage is strategically used during the sale of a property when a known pollution exposure exists and estimated clean up costs have been established; in effect, if costs exceed a certain threshold, the remediation policy would step in to pay some or all of the costs over the established threshold, on behalf of the new property owner.
  • Underground Storage Tank Compliance Policies: Provides environment impairment liability coverage for owners or operators of underground storage tanks as a result of the release of pollutants.
  • Combination Policies: Combination Policies include more than one type of environmental insurance in one policy. Advantages of purchasing a combination policy include:
        • Eliminates a coverage dispute that might otherwise occur if the coverage were provided by multiple insurers
        • Costs less than buying the same coverage under separate policies
        • Reduces the chance of two separate insurers denying a claim that may fall in a grey area
A pollution liability exposure is not exclusive to contractors and businesses engaged in the repair, manufacture or transport of pollutants. Schools and property owners, for example, may also unknowingly have an environmental exposure.