Spotlight on: Endorsements – TSHS and TPL

By Allison McGreal, Assistant Vice President – Underwriting Division

Generally speaking, the Contractors Pollution Liability (CPL) form provides coverage for your operations performed away from premises you own, rent, lease, or operate. Many contractors may have reason to store hazardous waste or material on their sites. If Site Pollution is a usual exposure, as with a gas station, recycling plant, or other facility, the Environmental Impairment Liability, or Site Pollution Liability (EIL) form, is appropriate. However, when the site storage is a temporary exposure or is incidental in nature, the “Temporary Storage of Hazardous Substance” endorsement (TSHS) may be used. This is just one of the important endorsements that can be added to a policy to make sure an insured’s exposures are properly being addressed.

Depending on the carrier’s exact endorsement wording, there may be certain restrictions to coverage. The duration of time that materials may be stored on your site, the hazardous substances allowed, and method of storage may affect the coverage. Some carriers require a maximum limit of 30 days on the site, they may require the material be stored in a certain type of facility and in protected containers designed specifically for storage and disposal of hazardous substances, or may require secondary containment. The carrier may also exclude coverage if materials are stored in underground storage tanks (a separate UST policy would be required). The TSHS endorsement provides 3rd party coverage—it is written on a claims-made form and the covered location(s) must be scheduled on the endorsement. Examples of contractors who may benefit from this coverage include waste recyclers, remediation contractors, debris removal contractors, and waste haulers.

Another exclusion from the standard CPL policy is related to auto, aircraft, watercraft, and rolling stock. The exclusion typically does not apply to use of these within the boundaries of the jobsite; however, no coverage exists once materials are transported beyond the jobsite. This also includes loading and unloading away from the jobsite. A common approach to covering this exposure is by endorsing Transportation Pollution Liability (TPL) and/or Contingent (TPL) coverage. TPL provides coverage for vehicles owned, operated, used, or maintained by the insured. Contingent TPL provides the insured with coverage when hiring a carrier to transport the insured’s product or wastes on their behalf. This endorsement offers bodily injury, property damage, and clean up costs but typically does not include mis-delivery of the product to the wrong location.

TPL coverage is being offered by carriers more frequently and may often be a selling point when marketing accounts. If it’s not included, be sure to discuss the exposure with your underwriter. You should keep in mind that many substances, even those not considered “hazardous,” may cause a pollution condition if they are mishandled, spilled, etc. The TPL coverage would respond in many cases but if the contractor has a more significant transit pollution exposure, the ‘MCS 90 or hauls placarded materials,’ an Auto Pollution policy may be a better alternative to the TPL endorsements.

Talk with your Beacon Hill representative about TSHS and TPL endorsements to see if they may be beneficial to your clients’ policies. Having that discussion may help you bind a challenging account, as well as provide better insurance options for your insured.