Why Your Business May Need Pollution Coverage

Almost all businesses have some risk of being sued or cited for pollution, even the most benign, such as a property owner.

Pollution exposures for many businesses are obvious – like dry cleaners from the chemicals they use, to printing companies from the ink they use. And any manufacturer would face some type of pollution exposure as well, in addition to warehouse operators and contractors

Think you’re not exposed? Say you own a business property, even an office building for example, you could have pollution exposure such as:

  • The existence of lead (paint and pipes) or asbestos.
  • Releases of pollutants by tenants from improper or inadequate storage or disposal of lubricant oils, primer or lab waste material.
  • Inadequate containment in loading areas that could lead to the release of pollutants.

However, as the risks have grown for pollution liability, most commercial general liability policies now exclude pollution coverage. It’s something to be aware of for most any business, particularly as the list of what is considered to be a pollutant has grown dramatically.

The exclusion

The easiest way to think of a pollution exclusion is that it can apply to a contaminant. Virtually every commercial general liability policy includes a pollution exclusion.

These policies used to cover pollution but as the risk for being sued for pollution has grown, so then has the exclusion.

The standard policy has two pollution liability coverage forms. It also has a special form for underground storage tanks.

The current version of the Insurance Services Office (ISO) commercial general liability form has pollution coverage narrowed down to a few covered occurrences, typically including:

  • Certain off-premises exposures
  • Certain product-completed operations
  • Smoke, fumes, soot, vapors from your heating equipment or from a fire in your building
  • Gas or fumes from materials you bring into a work site.

The broad definition of pollution

Consider these examples:

  • A food company in Wisconsin recalled a batch of listeria bacteria-contaminated sandwiches and filed a product recall claim with its insurer. However, the insurer denied coverage based on the policy’s pollution exclusion. The court sided with the insurer, concluding that bacteria were an excluded ISO form pollutant.
  • A hospital in California was sued after an outbreak of legionnaire’s disease was traced back to a drinking fountain in the hospital lobby. The insurer rejected coverage for the lawsuits, citing a fungus and bacteria exclusion in their general liability policies.

The solution

What are the solution options when it comes to the pollution insurance question? You can have a specific commercial liability form or a separate pollution liability policy.

Pollution liability insurance is designed to address claims and suits involving pollution losses in which it is alleged that the insured is responsible, as well as property losses related to pollution on owned or occupied property.

Typically a pollution liability policy covers three risks:

Premises pollution liability — Covers first-party claims associated with pollution on the premises of the insured. (Example: It is discovered that instead of clean soil, contaminated soil was used to fill a space formerly occupied by an underground storage tank that leaked. The cost of remediation would be covered.)
It would also cover third-party claims associated with the pollution (like when a person falls sick due to the pollution).

Contractors pollution liability — Covers bodily injury, property damage and remediation costs for which a contractor who causes pollution is liable.

Errors and omissions liability — Covers losses that result from wrongful acts performed in conducting professional services, such as a soil engineer erroneously rendering an opinion that there is no soil pollution, when in fact, there is.

BGES Group’s office, located in Larchmont, NY is a full service insurance agency offering, Property, Liability, Umbrella Liability, Business Auto, Bid & Performance Bonds, Inland Marine, Worker’s Compensation, New York State Disability, Group Health, Life insurance, Personal lines and Identity Theft.

Special Contractor Insurance Programs (NY, NJ, CT) – We we have 60+ insurance companies to market your general liability, umbrella liability, business auto, workers compensation, bid & performance bonds and group health coverages. We help contractors set up proper risk transfer. If you’re a contractor we offer extensive information about insurance markets, coverages, risk transfer, subcontractor screening, ways to lower your insurance costs.

BGES Group are Worker’s Compensation Specialists for the States of New York, New Jersey and Connecticut – Issues we address: 1) Lowering pricing – we have specialty programs that can save you up to 40%; 2) Finding a new company; 3) Replacing policies that are being cancelled or non renewed; 4) Audit disputes; 5) Company creating fictitious payroll at audit time; 6) Lowering high experience modifications factors; 7) Misclassification of payrolls; 8) Lowering or eliminating renewal deposits;  9) Getting coverage when you’ve been without for a few months; 10) Covering multiple states under one policy; 11) Eliminating 10% service or policy fees; 12) Timely issuance of certificates; 13) Always being able to get someone on the phone or by email when you need to.

 If you would like to speak with us call Gary Wallach at 914-806-5853 or click here to email or click here to visit our website.

Company: BGES Group, 216A Larchmont Acres West, Larchmont, NY 10538

e-mail: bgesgroup@gmail.com

website: http://www.bgesgroup.com

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