News From Beacon Hill – April 2015

Coverage Spotlight: Contractors Professional Liability

Blurred Lines between Contractor Operations & Professional Services Could Create Coverage Disputes

For many contractors, particularly those that are specialized, the line between contracting services and professional services has become gray. While they are performing their normal operations, they could face professional exposures by either making slight adjustments to plans to get the job done, supervising other contractors, or providing recommendations that could be considered professional services in the event of a claim. Examples of this may include:

  • HVAC Contractor: while installing HVAC equipment, contractors occasionally have to re-design the layout of ducts and returns to accommodate weaknesses in the original architect plans. These design choices could easily lead to professional services claims.
  • Plumber: installing pipes and then having to reconfigure the pipe systems to account for the installation of a new bathroom (or laundry room, for example). If a pipe leaks after reconfiguring, there may be a question as to whether the leak was due to the redesign or installation of the pipe.
  • Road and Gravel Contractor: putting in a driveway that is pitched one way and having to redesign the driveway when it is discovered that water runoff is going into a neighbor’s yard and taking with it some of the gravel.

Bridging the Professional Liability Gap

One way to ensure that both contracting operations and professional services are addressed in an insured’s coverage is to purchase a combined Contractor Pollution Liability and Professional Liability policy. This will also help to avoid coverage disputes related to contractor versus professional services.

These policies may be purchased with or without a General Liability component. The Contractor Pollution Liability component is designed to respond to claims against contractors for bodily injury, property damage, and cleanup costs related to pollution incidents. The Professional Liability component is designed to respond to professional liability claims and most combined forms do not have a pollution exclusion as part of the professional liability component (although some do).

For more information about a combined Contractors Professional Liability program, please contact us.

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The Recycling Industry: Waste, Electronics, and More

In the last few years, the recycling industry has seen tremendous growth, mainly due to more awareness of sustainable living and efforts to reduce waste. E-recycling is also a completely separate industry now, with most people in the U.S. owning computers, mobile devices, and other electronics (and replacing them on a very regular basis!). While many of the recyclers are construction companies and contractors looking to make a profit from their scraps, other businesses who pick up, transport, handle, process, and store recycled materials are also expanding their recycling activities.

As more materials are sent to recycling centers, the environmental exposures at these facilities are increasing, oftentimes without facility owners or operators even realizing how much they are growing. Materials may arrive that cannot be recycled, therefore a proper temporary storage and disposal facility has to be located, on-site or off-site. The influx of goods means longer periods of storage at facilities that may not have enough space for adequate material segregation or enough containers for the material being stored. Since recycling machines are running for longer periods of time, consuming more fuel, fuel storage areas may need to be upgraded to contain the increased amount of fuel needed or releases in the event of fuel spills. In addition, more traffic at these sites may also increase the potential for the accumulation of petroleum hydrocarbons in the soil.

Recycling facility owners and operators should make sure they are adequately protected against these exposures by purchasing an environmental insurance policy. The following products are designed to protect these facilities and their owners/operators from potential environmental claims, ensuring their chances for future organizational success and stability:

Contractors Pollution Liability (CPL)

CPL/Professional Liability

Premises Pollution Liability (EIL)

To request more information about the recycling industry, email us.

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Recent Success Stories:

$1.6M Electrical contractor purchased a $1M/$2M CPL/E&O policy for $14,689.

$12M Pipeline contractor purchased General Liability, Broad Form Contractors Pollution Liability, and a $5M Follow Form Excess policy for a total of $933,000.

$2.6M Restoration contractor purchased a $1M/$2M CPL policy $5,263. The carrier was able to provide endorsements required by Alacrity.

$700k Sludge pond filtering within petro chemical plants company purchased General Liability, Contractors Pollution Liability, Transportation Pollution Liability, and a $5M Excess policy for $18,555.

$2.8M Manufacturer of hoses and pipes for the oil & gas industry purchase Products Pollution Liability for $18,043.

$200k Fire-water restoration contractor purchased GL/CPL/E&O including Mold, TPL, and NODS for $2,816.

$30M Soil excavation contractor purchased a $1M/$1M CPL policy for $10,535.

Multi story office building purchased a 3-year, $10M limit Premises Pollution Liability policy coverage for $38,100. Coverage includes both new and pre-existing condition.

$1.5M Restoration contractor purchased GL, CPL with mold, and E&O for $20,000.