What Does Pollution Insurance For Your Business Cover?
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Pollution and environmental conditions are growing exposures for many businesses, but many people are wondering what does pollution insurance for your business cover? The short answer to what does pollution insurance for your business cover is simple… pollution insurance for your business is available to protect companies from the risk of legal liability and unexpected abatement costs resulting from the the discovery of environmental contaminants. There are countless possible pollutants, environmental conditions and contaminants in any building or property, and more could be discovered at any time. Many claims that insurance companies classify as pollution-related are ones that you may think would be covered under your commercial general liability (CGL) policy, but are not.
History of Pollution Insurance For Your Business
Pollution insurance for your business dates back to the mid- to late-1980s, and has evolved since then to keep pace with changing trends, new exposures and greater coverage needs. The first policies, known as pollution legal liability insurance, covered third-party bodily injury, property damage and cleanup cost claims that resulted from the offsite release of environmental contaminants from the insured’s property. These policies, though better than nothing, had several shortcomings: they didn’t cover any claims resulting in on-site contamination, and they didn’t cover any first-party cleanup costs.
The early 1990s brought expansions to pollution policies as they began to cover claims for on-site contaminant releases and claims for first-party cleanup costs due to a newly discovered environmental condition. Most carriers limited this first-party coverage to cleanup costs that the site owner was legally obligated to pay, such as staying in compliance with local, provincial or federal standards.
In addition, newer pollution policies cover site owners for the entire lifespan of a property—from “cradle to grave” (as long as the owner has coverage throughout this entire period). This lifespan begins when the property is acquired, lasts throughout its useful purpose and ends when the property is abandoned or sold—because the property owner could be liable for environmental exposures during any phase of the property’s lifespan.
Many of the recent pollution policies also include previously known exposures, such as asbestos, lead-based paint or specific contaminant levels that were previously below legal standards. Such known exposures used to be widely excluded.
Pollution Insurance For Your Business Today
Currently, there are several types of pollution insurance for your business available, and most policies are customizable to fit a company’s unique risks and exposures. They often offer ancillary coverage options too, such as contamination during the transportation of goods.
What Pollutants Can Pollution Insurance For your Business Cover?
The following are just a sampling of possible pollution exposures that may affect your company:
- Chinese drywall (defective drywall containing unsafe levels of sulphur that has been released into the air)
- Toxic mould, fungus or other bacterial contamination
- 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
- Improper waste disposal (including medical waste)
- Building or car exhaust/fumes
- Malfunctioning of HVAC or ventilation equipment
- Malfunctioning, crumbling or leaking of older buildings and pipes, causing contamination
To Discuss What Does Pollution Insurance For Your Business Cover Or For A Pollution Insurance Quote Contact One Of Our Many Licensed Canadian Commercial Insurance Brokers Today at 1-866-287-0448
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