What is Contractors Pollution Liability Coverage?
Contractors Pollution Liability insurance (CPL) is coverage designed to protect from third party claims for damages caused by “Pollution Conditions” arising from the insured’s covered operations. Adding “Mold” coverage broadens the defined list of covered pollutants to include molds, funguses, etc.
The policy provides coverage for Bodily Injury and Property Damage, but only for their operations performed at a jobsite as well as clean up costs at the site. Coverage applies to work done by the insured or on the insured’s behalf and includes defense costs coverage if the insured is involved in a lawsuit.
Depending on optional endorsements selected for a policy, coverage may also apply to 1st/3rd party transportation, non-owned disposal sites, temporary on-site storage, mold, punitive damages and terrorism.
How Does Contractors Pollution Liability Coverage Work?
General insurance policies are designed to cover many of the common exposures insureds face. Environmental insurance coverages are designed to respond to the environmental exposures that may not otherwise be covered by traditional policies. These exposures may include: Disturbing or exacerbating existing pollutants, contractor’s operations lead to pollution release, job site pollution caused by contaminants the contractor brought to the site, the operations of subcontractors for which the contractor is responsible, and over the road pollution.
- Generally designed to address the coverage gap created by the CGL pollution exclusions.
- Policies usually written to provide coverage for operations performed “by or on behalf” of the insured.
- Coverage is provided for the insured’s operations away from their own premises.
- Base policies can be written on either a Claims Made or an Occurrence basis.
- Mold coverage is usually offered as an endorsement to the CPL insurance policy or coverage part.
- Mold is usually on a Claims Made form.
- Mold coverage may have a sub limit of liability, as well as its own deductible.
Optional Coverage Enhancements:
Most environmental insurance carriers offer a variety of enhancements to their policies to make the coverage more tailored to the insured’s needs. These enhancements may include:
- Over the Road Pollution for the transportation operations of the insured.
- Temporary storage of contaminants on the insured’s property.
- Loading and unloading of vehicles at the job site.
- Incidental professional.
- Blanket waiver of subrogation, additional insured.
- And many others….
Who Buys Contractors Pollution Liability Insurance?
Environmental service providers of all shapes and sizes should carry Contractors Pollution Liability and non-environmental trade contractors should also have CPL coverage as part of their insurance plan.
Specific target risks may include:
- General contractors
- Roofers, plumbers, and electricians
- Carpentry contractors
- HVAC/mechanical contractors
- Sewer and septic contractors
- Utility contractors
Examples of CPL claims
- A residential contractor unknowingly spread petroleum contaminated soil across a project site during fill operations for a housing project. The contractor was named in a lawsuit for exacerbating the extent of contamination. After lengthy deliberations, the contractor spent $250,000 in cleanup costs and defense.
- While a mechanical contractor was repairing leaks on fuel lines at a shipyard, an unknown party opened the valve that separated the inactive lines under repair from the active lines. Fuel began to flow through the lines under repair, releasing 3,500 gallons of gasoline. The cost to clean up soils and groundwater contaminated by petroleum hydrocarbons was $500,000.
- A street/road contractor was subcontracted to pave a parking lot for a new commercial structure. At the end of the day, the tack coat was sprayed onto the sub-base prior to paving. During the evening, a major thunderstorm caused the tack coat to wash off and flow into a nearby stream. The general contractor was responsible for cleanup costs, which exceeded $200,000. To recoup these costs, the general contractor withheld the subcontractor’s payment. In turn, the subcontractor filed a claim with its insurance company to recover lost revenue. The insurance company denied reimbursement based on the absolute pollution exclusion under the general liability policy.
FAQs About Contractors Pollution Liability Insurance
How do underwriters typically determine the cost of Contractors Pollution Liability?
The cost of pollution insurance varies widely depending on the size and type of insured, limits being requested, claims history, etc. Our carriers evaluate the range of operational risks associated with the insured, geographic location, length of time in business, and other factors that may help to shape the account. The minimum premium for a monoline Contractors Pollution Liability account starts around $1,000. Check out our other products and pricing here.
What is the difference between Site Pollution and Contractors Pollution?
Site Pollution coverage is for a fixed site, it is for a property that the insured owns or leases and it provides first party coverage for spills on the insured’s site which is scheduled on the policy. A Contractors Pollution Liability policy covers ongoing and completed operations for a contractor’s operations that are preformed away from their owned or leased site.
Contact us to discuss getting a CPL quote.
Premiums start at $1,000, and limits are available from $500,000/$500,000 to $25,000,000.
Beacon Hill can help you round out coverage for your clients by packaging some of the additional products below. Writing these coverages with the same carrier adds efficiency, protects against potential coverage gaps, and helps generate the best possible pricing for your insured. Please let your Beacon Hill contact know if you have any questions.