Environmental contractors face a number of unique exposures from their operations and business locations. Mishaps such as improper handling and storage of materials can lead to pollutant spills and liability to contractors. In addition, unknown factors including existing site contamination and structural conditions present potential environmental risk.
Because the CGL form excludes Pollution Liability, it’s important for environmental contractors to purchase both CGL and Contractors Pollution Liability. There are advantages to buying a combined policy form. Many carriers offer package credits for binding more than one line of coverage and a combined form also eliminates or lessens the chance there will be a gap in coverage. If there is a gray area, the carrier will determine whether it’s a CGL or CPL claim but if there are two carriers involved, claims handling becomes more complicated. Writing multiple lines with one carrier also helps retain the account at renewal and helps develop loyalty with the carrier.
For many carriers, the determining factor as to whether an account has enough “environmental” exposure is integral. Most carriers require a minimum of 25-50% environmental operations before they’ll consider offering a combined policy form. Contracting operations that fit this category include but are not limited to:
- Asbestos abatement
- Environmental consulting
- Wastewater treatment plant operations/maintenance
- Air monitoring
- Regulatory compliance/permitting services
- Mold Inspection and abatement
- Soil/groundwater remediation
- Lead abatement
- Storage tank contractors
- Emergency response
- Analytical laboratories
- Fire & water restoration
- Industrial cleaning
- Biosolid application
- Environmental drilling/sampling
In addition to writing the CGL and CPL lines, some contractors may have other exposures that may be addressed by adding endorsements. Your clients understand their own business but they rely on you to make sure they have the proper coverage to insure that business; this is why it’s important for you to ask the right questions. You may be talking with an asbestos abatement contractor who clearly needs the CGL/CPL, but do they transport the bagged asbestos to a disposal site or bring it back to their own site for temporary storage while awaiting a 3rd party to transport? These are exposures not typically covered in the policy forms but may be included by endorsement. Reviewing and understanding exclusions is equally important. Some carriers have exclusions for asbestos, lead, mold, EIFS, or work performed by subcontractors. You should ask for and review specimen forms and endorsements to ensure you understand the policy you are offering to your clients.
What does insurance for environmental contractors cover?
Within the CGL portion of the combined form, the policy provides coverage for Bodily Injury, Property Damage, and Defense Costs for claims arising out of the insured’s operations at premises owned or controlled by the insured as well as for their ongoing and completed operations performed away from their premises at a jobsite.
Within the CPL section of the combined form, the policy again provides coverage for Bodily Injury and Property Damage, but only for their operations performed at a jobsite as well as clean up costs at the site. Coverage applies to work done by the insured or on the insured’s behalf and includes defense costs coverage if the insured is involved in a lawsuit.
Depending on optional endorsements selected for a policy, coverage may also apply to 1st/3rd party transportation, non-owned disposal sites, temporary on-site storage, mold, punitive damages and terrorism.
Environmental contractors and consultants should consider the following coverages:
Contractors Pollution Liability
Contractors Pollution Liability insurance (CPL) is coverage designed to protect from third party claims for damages caused by “Pollution Conditions” arising from the insured’s covered operations. Adding Mold coverage broadens the defined list of covered pollutants to include molds, funguses, etc. We are able to add the General Liability and Professional Liability for most environmental contracting accounts.
Contractors Pollution Liability/Professional
The Contractors Pollution Liability/Professional Policy is a combined Pollution and Professional coverage form. It provides coverage to environmental consultants, environmental engineers, and other environmental professionals who have an E&O exposure from their professional services, as well as a pollution exposure from any jobsite/project management operations. We are able to add the General Liability for most environmental consulting accounts.
Site Pollution Liability
Site Pollution Liability insurance is designed to cover claims arising from pollution releases at, on, or emanating from a specific scheduled location. Examples may include a contractor’s equipment yard or a self-storage facility.
A Workers Compensation policy provides coverage for an employer’s exposure arising out of job-related injury/death resulting from an accident or occupational disease sustained by employees. Moving Workers Compensation accounts from assigned risk (or other state programs) into a program will offer exceptional coverage at a very competitive rate.
Automobile insurance coverage is typically required for most businesses; an Auto policy including Pollution is an ISO based Auto form including broadened pollution endorsements and any motor carrier filings.
Follow Form Excess Liability
If underlying General Liability, Pollution and/or Professional Liability is offered, a Follow Form Excess policy is also available. The Follow Form XS will go over the qualifying environmental coverage lines, as well as the underlying Auto and Employers Liability if applicable.
Check out a recent package policy we wrote for an environmental contractor!
Abatement Contractor Needing a Package Policy With Options
We recently worked on an account for a $1.3M abatement contractor needing GL/CPL/E&O and a $2M Excess policy. The insured was interested in potentially moving coverage from the existing agent to our retail agent. We were able to help our agent win the account by providing a full coverage review of our quotes vs. the expiring program. The coverage placed was at a competitive premium and gave broader coverage for the insured compared to the expiring program. We were also able to offer a reduced revenue quote option for the insured prior to binding based on the instability of the projected revenue for the insured because of the Covid-19 pandemic. By offering a flexible solution and the tools to compare and sell the coverage, Beacon Hill helped the agent bind the account and the insured secured an insurance program designed to fit their needs. Total premium was $11,300.
For more information on environmental contractors or to discuss an account opportunity, please contact us.