Premises Pollution Liability

What is Premises Pollution Liability?

Site pollution liability insurance is designed to cover claims arising from pollution releases at, on, or emanating from a specific scheduled location. A “location” can be as broad as an entire piece of property or as narrow as a specified storage tank.

Premises Pollution Liability is Also Known as:

• Premises Pollution Liability
• Environmental Impairment Liability (EIL insurance)
• Pollution Legal Liability Insurance (PLL insurance)

How Does Premises Pollution Liability Work?

A Premises Pollution Liability policy 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.

Each location is individually underwritten to make a determination as to the extent of coverage that can be offered. For example, a clean site without a history of adverse operations or pollution conditions and where relatively benign operations are now being performed, can typically purchase broad coverage to include First Party Onsite Cleanup, Third Party Bodily Injury/Property Damage, and Offsite Cleanup for both new and pre-existing conditions (no retroactive date). However, often there are circumstances at a location that may require customizing coverage by establishing a retroactive date, providing coverage only for conditions that arise and are reported after this date and within the policy period.

Additionally, policies can be tailored to fit very specific needs, such as limiting coverage to just onsite cleanup, or offsite Bodily Injury. It is this flexibility that makes these policies very powerful risk management tools. Most coverage forms are fairly flexible and coverage is always Claims Made.

• Coverage is triggered either by a claim for damages from a third party, or by the discovery of contamination above “Action Levels” on the insured’s premises.
• “Action Levels” are a very important concept to understand. These levels are set in every community on a Federal, State, or local level. They represent the allowable concentration of any contaminant for the area in which the contaminant is discovered.
• Policies clean up pollutants to the acceptable level dictated by the governing authority. In other words, if you have pristine land on which you spill diesel fuel, you will end up with whatever the allowable level of diesel fuel is by the governing authority.
• Coverage can be modified to cover only new conditions occurring from policy inception onward, or unknown pre-existing conditions, or both.
• Coverage can be constructed to apply to only On Site Bodily Injury, Property Damage, and Clean Up, or only Offsite, or both.
• Coverage is very flexible.
• Coverage is almost always Claims Made.

Optional Coverage Enhancements

Coverage can be customized to the the needs of the insured. It is important to carefully review your client’s operations and activities to correctly address their insurance needs. Optional enhancements may include:

• Mold, Fungus, and Legionella coverage
• Non-owned disposal site coverage
• Illicit abandonment
• Transportation Pollution Liability coverage
• Can be packaged with Products Pollution Liability Insurance

Who Needs Premises Pollution Liability?

Almost all premises have a pollution exposure, from an insured’s day-to-day operations, a neighbor’s negligence of its facility, or even natural disasters triggering an event. Specific target risks include:

• Property Owners, Operators, and Managers
• Commercial office buildings
• Shopping centers/retail facilities
• Municipalities
• Educational facilities
• Industrial facilities, including:
  • Recyclers
  • Storage sites
  • Landfills
  • Warehouses
  • Manufacturers
  • Distributors
• Any purchasers or sellers of properties

Example of a Premises Pollution Liability Account

• A quick lube station purchased SitePollution Liability ($2M/$2M) for $34,963. Coverage includes Non-Owned Disposal Site coverage and Transportation Pollution Liability.
• An apartment complex purchase a Site Pollution Liability ($5M/$5M) for $110,775.
• $9M Pallet recycler purchased GL/Site Pollution Liability ($1M/$2M) and Excess ($1M/$1M) for $46,909.

Coverage Cost

Stand alone environmental impairment liability insurance currently costs as little as $3,000, with deductibles starting at $2,500. Limits are available from $500,000/$500,000 to $25,000,000

Additional Resources

See also: Premises Pollution Liability for Property Developers