Owners and operators of manufacturing facilities have a unique set of exposures stemming from the activities that are part of their daily operations, the premises on which the operations are performed, and handling/distributing the products being manufactured. Exposures may also be present due to the sheer size of these facilities and the amount of goods typically stored on-site at any given time. Beacon Hill specializes in helping agents with this type of insured access the proper insurance to protect them in the event of a claim. We can help you explain the environmental coverages to your insureds, and seek the options that best suit them and efficiently manage the binding process.
Common Environmental Exposures for Manufacturing Businesses
Presence or generation of contaminants.
Unlike many types of pollution exposures, manufacturing risks have a high level of inherent exposure in their operations. Whether it is the raw material used in the manufactured product, cleaners used in the manufacturing process, or the substances used to run and service the machinery, facilities have a significant on and off site pollution exposure. The exposure extends not only to the actual materials handled, but to the waste stream generated by the facility, as well as long term incremental contamination of the property. Exceeding discharge permits or contaminating the local groundwater are both environmental liabilities all manufacturing risks face.
Manufactured product causes a pollution event.
A substantial exposure for manufacturers remains the liability associated with their product. While most CGL programs provide coverage for the failure of the product, many exclude any pollution resulting from that failure. In the case of a manufactured vessel failing and releasing the product it held into a person’s eyes, into a body of water, onto the ground which leaks into the soil, etc., this could lead to a pollution claim. If a product is a blended chemical and it interacts with the environment improperly through miss blending, it could cause a pollution problem. It is important to recognize that the CGL carrier may be able to take any resulting pollution event and use it as grounds for declination of coverage.
Contracting operations performed away from the site.
Some manufacturers may be involved in the installation of their product or in service after the sale. These job site operations can lead to potential environmental issues. Exposure can come from materials brought to the site by the service team (fuels, lubricants, solvents, cleaning agents, etc.) or from an actual accident caused by the service people directly, such as a cut fuel pipe, breached tank wall, etc.
Disposal of Waste – Non-Owned Disposal Site coverage.
Every manufacturing process generates a waste stream of some sort. This may be discharged under permit into the sewer system or a stream, or it may be collected in drums for disposal. Waste retention lagoons are regularly pumped and cleaned, with the resulting byproduct disposed of. As the generator of the waste, the manufacturer retains a degree of liability for the waste, even when it’s been properly disposed of. This can lead to claims at locations completely removed from the insured’s site.
Over the road transportation of products, contaminants, or waste.
Transportation creates a wide range of exposures for all insureds. Whether it is the insured bringing in raw materials or delivering their product, or a third party hired by the insured disposing of waste, a spill on the highway presents an environmental exposure for the Insured. This over the road exposure can come from the Insured operating their own vehicles, or through their contingent liability for those they hire.
Environmental liability insurance policies that address the needs of manufacturers:
What is Site or Premises Pollution Liability Insurance?
Site Pollution Liability insurance is designed to cover claims arising from pollution releases at, on, or emanating from a specific scheduled location. A “location” can be as broad as an entire piece of property or as narrow as a specified storage tank.
Site Pollution Liability Insurance is . . .
What is Contractors Pollution Liability Coverage?
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.
How Does Contractors Pollution Liability Coverage Work . . .
What is a GL/Products Pollution policy?
Products Pollution coverage is a package liability product available to many manufacturers and distributors. A combination GL/Products/Product Pollution Liability policy includes Bodily Injury, Property Damage, and Clean Up coverage for third party claims. The Products Pollution coverage part can be provided by either a stand alone . . .