By Dana Hartwell, Socius Insurance Services
While the General Liability coverage endorsement CG0001 does aord a slight amount of insurance for Pollution coverage, it is standard for most companies to add on an Absolute Pollution Exclusion endorsement, thereby eliminating even the minor coverage afforded by the form. This leaves a gap in coverage for claims caused by Pollution. Standalone Pollution coverage can be purchased to ll that coverage gap. Here is a quick overview on how Pollution coverage came about, who needs it and why.
In 2006, CPL [Contractors Pollution Liability] comprised approximately 30 to 40 percent of the entire environmental insurance marketplace which is estimated at $2 billion in annual premiums.4 This large market share of Pollution coverage is taken up by general and artisan contractors whose work does not appear to have environmental impact, but if done incorrectly, or without the necessary research, could cause pollution damages.
Some examples of potential Contractors Pollution claims include 5 :
There are many high hazard types of businesses that require Pollution coverage. Those who definitely make the list are any insureds whose primary exposure is to set up, bury, distribute, spray or clean up chemicals of any kind or work directly with chemicals and pollutants. This includes, but is not limited to, any manufacturing facilities, environmental contractors, insureds who work with remediation and abatement, anyone who installs storage tanks underground or even owns and operates those storage tanks, like a gasoline station. And above and beyond the high hazard classes and the contractors, there are the insureds who commonly work with large amounts of chemicals for cleaning, like those in the janitorial services and restaurants.
Two environmental laws in the 1980’s brought about a need for specialized Pollution coverage after they caused changes in the General Liability form. Over the years, the coverage had evolved to be specialized for the market segment that the insured falls in to. There are many types of insureds who need this coverage, even if they are not high hazard. Pollution coverage would be a great way to round out coverage, and leave no gaps for the insured. Socius has access to great company partners who can assist in the placement of this business. Please contact your Socius underwriter for more information, and we can help you place your business.
1 Stanovich, C. (2003, March 1). The CGL Pollution Exclusion. Retrieved December 14, 2015, from https://www.irmi.com/articles/expert-commentary/the-cgl-pollution-exclusion
2 History of the Resource Conservation and Recovery Act (RCRA). (2015, October 21). Retrieved December 14, 2015, from http://www.epa.gov/rcra/history-resource-conservation-and-recovery-act-rcra
3 Summary of the Comprehensive Environmental Response, Compensation, and Liability Act (Superfund). (2015, October 13). Retrieved December 14, 2015, from http://www.epa.gov/laws-regulations/summary-comprehensive-environmental-response-compensation-and-liability-act
4 Slivka, J. (2007, October 1). Contractors Pollution Liability Update. Retrieved December 14, 2015, from https://www.irmi.com/articles/expert-commentary/contractors-pollution-liability-update
5 Contractors’s Pollution Exposures. (2014, April 1). Retrieved December 14, 2015, from http://www.acegroup.com/us-en/assets/contractor-pollution-exposure_2014.pdf