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.
- 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