Why Contractors Need Pollution Liability Insurance
The American Institute of Architects is forecasting an increase of up to 4% in non-residential building in 2018. With increased construction comes increased pollution. According to the EPA, 25%, or 160 million tons, of non-industrial waste generation in the United States is caused by construction activity. Construction tools and resources used on job sites can significantly harm public health and the environment, leading to lawsuits and claims.
This year a new OSHA standard requires construction firms to reduce worker exposure to crystalline silica. Occupational disease claims from silica exposure are covered by workers compensation insurance, but most General Liability policies for contractors exclude silica and silica dust claims – in addition to exclusions for asbestos, lead, fungi, bacteria and possibly a total exclusion of pollution.
With all of these gaps in coverage it would seem to be a no brainer for contractors to purchase Pollution Liability insurance. This is not the case. Of approximately 650,000 contractors in the United States, only about 20-25,000 purchase Contractors Pollution Liability. Coverage is widely available, relatively cheap and insures a variety of risks. Almost every construction contract requires evidence of pollution insurance. It should be part of every contractor’s insurance program.
There are a number of ways to cover Pollution Liability. It can be combined with first party cleanup costs in a package. It can be written as stand alone coverage or in combination with General Liability. For contractors with professional exposures it is possible to combine General, Pollution and Professional Liability into a single policy with one insurer, reducing the chance of coverage gaps and disputes.
What does pollution insurance cover? In addition to job site exposures policies can cover transportation risk, non-owned disposal sites, sudden and accidental pollution incidents, and emergency response costs. Covered pollutants include microbial matter, Legionella, silica, petroleum hydrocarbons, low level radioactive waste, medical waste and electromagnetic fields. Policies with longer terms than one year are available, and limits can be as high as $10 million or even $50 million.
With pollution claims expected to rise while prices remain stable to slightly lower, there is no excuse for contractors not to insure their pollution risk. Beacon has long experience with environmental insurers and will work to obtain the best available coverage for you.