By Sara Kooij, Senior Broker
Some well-intentioned agents may think: “My insured doesn’t manufacture or blend dangerous chemicals, so they don’t have any pollution exposure. There’s no need to charge them for the cost of Products Pollution Liability if they don’t need it.”
It’s true that chemical manufacturers–such as those making industrial coatings, adhesives, fuel additives, fertilizers, water treatment chemicals, amongst others–often recognize they have a pollution exposure and thus may be more likely to purchase Products Pollution Liability coverage. However, there are plenty of seemingly innocuous products out there whose failure can (and has!) resulted in costly pollution claims.
For instance, manufactured parts or equipment that are designed to contain, monitor for, or neutralize pollutants always have the potential to fail. Consider dust collection, fans, or exhaust systems. If any of these types of products malfunction, it could result in dangerous levels of irritants, vapors, or fumes. And insureds who manufacture products such as sealants, tubing, storage tanks, clamps, pipes, or valves designed to contain, move, or otherwise control pollutants should be aware that any failure of their product to perform as intended will most likely result in the escape or spillage of potentially hazardous pollutants.
Your insured may even be a manufacturer of what they consider nonhazardous chemicals such as detergents, waxes, polishes, grease, lubricants, or paint, but these have the same potential to cause a pollution condition as any other hazardous chemical manufacturer.
Distributors may believe they are protected from exposure since they’re not the ones making the product being sold, but they can be held legally liable as well. Occasionally these distributors may even decide down the road to begin their own manufacturing operations in order to meet demand. When they do, they may not think to reevaluate their General Liability policy coverages.
It’s important to make sure your clients are aware of any pollution exclusions as a part of their GL program, and that there are carriers who offer products to fill these gaps. Many of our carrier partners offer Products Pollution Liability as an enhancement to their General Liability coverage on a package form. These package policies often include Transportation Pollution Liability coverage for their over-the-road pollution exposure, including loading/unloading, as well as Non-Owned Disposal Site coverage as it relates to waste generated from the insured’s operations. Some carriers may be able to offer Products Pollution Liability coverage on a standalone policy as well.
Don’t leave your clients in the dark about their CGL pollution exclusions. Beacon Hill has partnerships with carriers who can help tailor products to meet their needs and fill their pollution gaps. While no two policies are identical and may have specific conditions and exclusions that restrict coverage, know that Beacon Hill is able to provide coverage comparisons upon request.