A Discussion of Transportation Risks & Pollution Coverage

By Allison McGreal, Assistant Vice President, PartnerOne Environmental

Underwriters are seeing an increase in Auto submissions being shopped with multiple carriers in the hope of finding a viable market for this business. It’s important for brokers and agents to fully understand the risk and exposures but also, the carrier appetite.

Some initial questions to ask about these risks:

  • What is being hauled?
  • Who is doing the hauling?
  • What other services are provided?
  • Where is the load picked up? Dropped off?

Examples of businesses with transportation exposures

Contractors with transit exposures.

A contractor hired to pump used oil from USTs at a lube facility has a significant contracting exposure prior to leaving that jobsite. They are operating the vacuum truck and possibly cleaning the tanks. This is an ideal risk for an environmental GL carrier and may be addressed by offering the CGL/CPL as well as transit pollution liability for once the truck leaves the jobsite. Other examples of this type of risk are asbestos abatement contractors transporting the bagged contaminated materials for disposal, a soil remediation firm hauling “dirty dirt,” or fire/water damage restoration contractors taking the mold or other contaminated materials away.

A company that primarily hauls from various job sites to disposal sites.

Risks falling into this category tend to have more of a transportation exposure but are still considered an eligible risk in most cases. This includes the contractors who drop off roll-off containers at a job site, then pick up and haul away for disposal. Another fit is a mobile recycler using truck mounted equipment to separate materials at a jobsite then hauling the materials to their next destination.

Businesses that haul freight/commodities.

This type of an exposure is truly a trucking risk. Examples would be a trucker picking up paint at a warehouse and hauling to a retail store for resale. This would also apply to any trucker hauling food, oil for gas station sales, or any other freight or commodity.

Some carriers are comfortable offering CGL/CPL, Site Pollution Liability, and BAP coverages for all of the above and others may have limitations to what they offer. It’s important for the agent to know which carriers will offer the full spectrum of coverage and which may have concerns with any of the individual lines. When looking at offering pollution coverage for the transportation exposures, it’s also important to ensure the auto carrier is offering the proper coverage and if not, look at adding an endorsement to the CGL. A full review of the Auto policy may show they have the CA99 in which case, the 1st party transportation might not be needed but 3rd party coverage may be required.

Recent accounts with transportation exposures

We recently received a submission for an asbestos abatement and demolition contractor looking for CGL/CPL, BAP, and Workers Comp. The client bags the asbestos and other contaminated demolition debris. They then put the contained materials onto their trucks and haul to a disposal site. This was an example of a perfect fit for us in which we were able to provide the CGL, CPL, and 3rd party Transportation coverage, as well as the BAP with a CA99 endorsement. We were also able to write the Excess over these coverages and added the Workers Comp also.

Another recent account was a medical waste disposal firm. Their primary responsibility is picking up waste from doctor offices, clinics, hospitals, and nursing homes and transporting it for disposal. Although much of the exposure does relate to hauling operations , this is a nice example of a good environmental and transportation risk eligible for both CGL/CPL and the BAP.

We also quoted an insured specializing in septic tank cleaning and installation and portable bathroom rentals. The firm uses their vacuum trucks to empty the tanks, and then transports the material to their own facility where they use a dewatering process to separate the liquid from the solid waste. Once completed, they then transport the solid waste for disposal at a landfill. In this case, we were able to offer the package CGL/CPL, a Site Pollution endorsement for the work performed at their facility, and we also bound the auto policies for the variety of transportation exposures.

Other transportation risks that may be considered are as follows:

  • Construction debris, used oil, hazardous wastes, contaminated water/soil.
  • Roll off containers, Port-a-Potty,
  • Recyclable material removal/ disposal

If you have a risk that has a transportation exposure, please contact us and we’ll be happy to review it and determine which coverages and endorsements would be available. For more information and an application, please contact us.