By Tracy Durham, Associate Account Executive
Although Products Pollution Liability is often considered for manufacturers, they are not the only ones who could be held responsible when a pollution condition results from a defective or damaged product. Companies that sell or lease goods to others as well as companies that install, service, or recondition goods have a products pollution exposure. These companies may not be covered or protected by the manufacturer’s policy and the manufacturer may not have Pollution coverage.
Non-manufacturing companies may perform a service related to the product. A Contractors Pollution Liability policy addresses the work performed by the company, but will typically not address product damage or defect. If your insured installs products and a pollution condition results from improper installation or damage caused during installation, the Contractors Pollution policy should address the situation. If, however, the product itself has a defect or damage not as a result of the installation or servicing then this would be addressed by a Products Pollution policy or endorsement.
Companies who recondition or recycle products need to address the pollution exposure at their own location with a Premises Pollution Liability policy. They should address the exposure presented by the finished product at the customer’s location with Products Pollution Liability. Many carriers are addressing the products exposure as an extension of Premises Pollution policies.
It is important to address all aspects of a non-manufacturing company’s pollution exposure. Without Products Pollution coverage the company can be left with a gap in coverage and may be unaware that the existing lines of coverage don’t respond to the products pollution exposure. The GL policy often has a total pollution exclusion or very limited coverage for pollutants. Neither the GL policy nor a typical Contractors or Site Pollution policy are likely to respond to issues related to a product. Our website has some examples of Products Pollution claims scenarios.
Be sure to talk to your clients who install, service, rent, or sell products to others and make sure they understand the exposure. If you have questions about a particular risk, please give us a call and we can help walk you through coverage options. We can also help you find the application needed to provide a quote for this and other lines of coverage your client may require.