Pollution Liability Insurance, often known as environmental insurance, protects businesses against unanticipated pollution risks that aren't covered by regular casualty and property policies. It bridges a critical insurance coverage gap for contractors, as well as firms in commercial real estate, banking institutions, and a variety of other fields.
Contaminated locations, whether on existing land or in the future, can result in losses and/or damages, such as:
Example: It is discovered that contaminated soil was used to fill a space formerly occupied by an underground storage tank that is now leaking. Under Pollution Liability Insurance, the cost of remediation would be covered. It also covers third party claims associated with the pollution condition.
Example: A construction project generates gas emissions and other waste products that pollute the air, harming neighbouring residents. Contractors Pollution Liability covers the bodily injury, property damage and remediation costs.
Example: A soil engineer mistakenly deems there not to be any underground storage tanks on the property. It is discovered that there is in fact a decrepit fuel oil storage tank leaking oil into the ground. Pollution Laibility Insurance covers the costs are incurred in addressing the resulting damage.
Based on location, size, payroll, sales, and expertise, the typical monthly cost of a conventional Pollution Insurance coverage for small businesses ranges from $107 to $159 per month.
The cost of pollution insurance coverage will vary greatly depending on the type of your business. A company that employs a lot of hazardous chemicals would pay more for insurance than one that uses a few.
Other factors that influence costs include:
To find out how much it would cost for Pollution Liability Insurance for your small business, click on the orange button to get a free quote.
Entities that have risks related to the handling of pollutants and hazardous materials, design profesionals who work with projects where there are environmental issues as well as those who own and occupy premises that have environmental issues need Pollution Liability Insurance. They include:
Sudden and accidental pollution coverage refers to when a claim is reported and discovered. In order for the pollution event to be covered it needs to be reported as soon as possible. It will then cover boldily injury and property damage caused by the pollution spill.
If you are worried about a pollution incident happening at a specific location, you should have site pollution coverage. This will apply to shopping centers, manufacturing plants, and even a contractor’s storage area.
Pollution Liability Insurance coverages are designed to handle related losses to the business carrying the insurance policy (1st Party) and/or losses caused by the business to others (3rd Party).
First party: First party property losses are addressed by Premises Pollution Liability policies which are designed to protect insureds from pollution losses related to property that they own, rent or occupy. Environmental Liability Insurance is coverage for legal fees and judgments arising from third party claims of damage caused by pollution from the business.
Third party: Two types of policies cover third party liability pollution losses:
A business umbrella policy covers legal fees, injuries to third parties (not your workers), pollution liability claims, and other expenditures that exceed the underlying insurance limitations.
Pollution Liability Insurance covers both first and third-party harm caused by pollutants emitted as a result of your business's operations, however some plans solely cover third-party claims.
Limits on Pollution Liability Insurance policies are generally greater than limits afforded on General Liability Policies. This is because instead of defense costs being in addition to the limits of a policy (like a General Liability or Auto Liability policy) these costs are included in the limit of a policy. There can be both a per occurrence and an aggregate limit in the policy (Example: a Policy can have a $2 Million per occurrence limit and a $4 Million aggregate limit.)
These policies also contain a self insured retention. This means that before the policy affords coverage, the insured is responsible for a set amount of defense and indemnity costs.
For example, unfounded allegations that a contractor was responsible for a pollution event that resulted in contamination resulted in $25,000 in defense costs being incurred The policy has a self insured retention of $10,000. The insured will pay the first $10,000 of defense costs and the insurance company will pay the remaining $15,000.
Intentional Acts Intentional Acts are not covered by Pollution Liability insurance, as well as, any type of war and terrorism.
Failure to Maintain Insurance This happens when the contract specifies a minimum limit of insurance the contractor must maintain, but the contractor fails to procure sufficient limits.
Asbestos However, in some circumstances, the policy can be endorsed to provide coverage.
Contractual Liability If the insured has a contractual obligation to provide coverage, it is not covered. However if there is liability absent the contract, or the contract is an, “insured contract,” such as a lease of a premises, the loss is covered.
Employers Liability It is covered by Worker Compensation, Employer Liability, Employment Practices Liability or Employee Benefits Liability depending on the facts and circumstances.
Worker Compensation An employee's injuries are covered by the employer's worker compensation policy.
Product Liability Product Liability is not covered by Pollution Liability insurance, as well as failure to maintain insurance (the contract specifies a minimum limit of insurance the contractor must maintain, but the contractor fails to procure sufficient limits).
Vehicles and non-owned storage facilities An auto operates using pollutants and there is specific coverage for pollutant clean-up and removal of these pollutants. In addition to that, any contamination of a storage facility (by disposing hazardous materials), not owned by an insurer, is not covered by Pollution Liability insurance.
Named Insured vs Named Insured This happens when one contractor named under a policy sues another contractor covered by the same policy.
Your Business If you are involved in any kind of event that causes pollution to the environment such as a chemical spill, oil and gas leaks, or other unintentional hazardous material release that is a part of your business operations, Environmental Impairment Liability will protect your business.
Your Suppliers Having agreements with suppliers means someone else to indemnify if something happens on your watch. For example, if you are hauling a product for a supplier and have a spill, they could be brought into the lawsuit as well and your policy would provide coverage first, per your agreement.
This insurance is great for businesses who offer advice to their clients. Professional Liability Insurance specifically covers a business from being liable should an error or omission occur, that leads to a financial loss for the customer.
Just like your personal auto policy, Commercial Auto Insurance, covers liability, collision, and medical payments should an accident occur with your commercial vehicle. Your personal auto policy will not cover damages while the vehicle is being used for business purposes.
Umbrella Liability can be a great solution for a business that needs more liability coverage than what is offered in their General Liability, Employer’s Liability or Auto Liability Plan. Umbrella coverage can be purchased as a standalone policy or can be bundled with a General Liability policy.
This insurance provides a business with protection should a mistake have been made while delivering professional services. Your General Liability policy will not provide you with this level of protection, so if your company gives advice or provides contracting services you may need this insurance.
The D&O of a privately-held company are at risk from suits by a variety of different people, such as customers, competitors, suppliers and government agencies. However, the greatest number of lawsuits against directors and officers come from the employees of a company itself. Directors and Officers Insurance covers your management team, should things go south.
Leave your email so that your quotes will be sent directly to your inbox.
We won't spam you, we hate it too.