Sudden & Accidental vs. Broad Form Pollution Coverage

By Brett Amick, Assistant Vice President

For many years, the insurance industry has had a single approach to pollution in the energy sector —sudden and accidental pollution coverage. The biggest issue with this is that there are as many different sudden and accidental forms as there are companies offering this type of coverage. The last fifteen years has seen the emergence of companies willing to offer broad form Pollution for sites, contractors, and transportation risks in the energy sector. So why does the market continue to be dominated by carriers writing a more limited coverage?

First let’s talk about the main differences between sudden & accidental and broad form Pollution coverage. Sudden and accidental has a time element trigger to find and report the release or incident. It typically excludes clean up and for contractors will often exclude completed operations and Action Over. So with that you have bodily injury and physical damage as long as you notice the release in time and report it in time. If you don’t, then you are without coverage. Additionally, once the job is done and your insured’s client signs off on the project and he leaves the job site his pollution coverage leaves with him. Lastly, if the cause of loss is a pollutant and one of your insured’s employees or a subcontractor is hurt, you may have no coverage at all.

Currently, most Contractors Pollution Liability policies are written on an occurrence basis and Site Pollution Liability are done on a claims-made basis. These policies have the ability to endorse on coverages that a sudden and accidental policy would not be able to cover. A few examples of these coverages are Transportation Pollution Liability and non-owned disposal sites. Broad form Pollution policies also do not limit themselves to above or below ground, in or out of water and air transmission. They also have the ability for first party triggers as well when needed.

Since most of your competitors are most likely not offering these types of coverages, this gives you a very real competitive advantage. When talking to your insureds, you will be able to show them that you have a better understanding of their needs and that one of the reasons they should work with you is that you have a broader understanding of the environmental insurance marketplace. Finding new clients and winning their business is getting harder every day. It’s our job to help you win these new clients with the best possible coverage the market can provide.

For more information on environmental insurance and the products we offer, feel free to call (800) 596-2156. You can also contact us for additional information on Sudden & Accidental vs. Gradual Pollution coverage.