The following CPL claims scenarios are a series of real life examples provided to us by our insurance companies. These represent actual environmental claims they have seen. While the coverages we offer are designed to address these general issues, we make no guarantee or warranty that any individual policy we offer your client will respond to all issues as described herein. Please refer to the actual policy wording in each offered form to determine coverage applicability and acceptability.
- Contaminated Soil-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.
- Mechanical Contractors-Fuel Release-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.
- Street & Road Contractors-Claim Denied-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.
- Street & Road Contractors-Ruptured Pipeline-A street/road contractor was subject to cleanup costs and business interruption expenses in excess of $500,000 when they ruptured an unmarked petroleum pipeline. The contents were released into the subsurface soil and groundwater because of the contractor’s inadequate response to the rupture.
- Utility Contractors-Claim Denied-A utility contractor was contracted to control the vegetation on a right of way (power lines). The contractor applied an herbicide to reduce the vegetation. After a rainstorm, the herbicide washed into the adjoining farmland. The farmer’s crops and land were severely damaged. The farmer filed a lawsuit alleging $350,000 in damages. The contractor filed an insurance claim with its general liability insurance carrier. However, the carrier denied the claim under the Absolute Pollution Exclusion, since the herbicide was intentionally brought on-site by the contractor.
- Utility Contractors-Contractual Liability-While installing new overhead electrical lines, a utility contractor had a subcontractor sinking the new utility poles. The subcontractor hit an underground sewer line with au auger while installing the new poles. Through contractual liability, the utility contractor was responsible for the actions of the subcontractor. Cleanup of spilled sewage and repair of the sewer line amounted to $190,000.
- Environmental Services Industry- A family-operated gas station hired a UST contractor to remove two underground storage tanks and associated contaminated soil. During the course of storage tank removal, the contractor’s backhoe hit a natural gas pipeline causing an explosion. Claims exceeded $2.5 million
- Environmental Services Industry-Failure to Report Release-During remedial activities at a Superfund landfill site, a remedial action contractor (RAC) inadvertently crushed several drums that were improperly classified as “empty.” As a result, several gallons of hazardous contents were released, causing localized soil contamination. The RAC failed to notify the EPA of the release, which resulted in both criminal and civil actions against the contractor. The RAC was held liable under CERCLA, and was required to pay penalties exceeding $6.1 million.
- Environmental Services Industry-Building Collapses-A remediation contractor excavated a small underground diesel tank near a distribution warehouse and noted that stained soil surrounded the tank. The project manager advised the firm to continue excavating around the tank, which pulled up the contaminated soil. Because of the foundation’s proximity to the distribution center, the excavation of contaminated material without proper shoring equipment caused the building’s wall to collapse. The distribution center’s walls and roof also collapsed. Reconstruction costs, business interruption, lost profits and additional remediation expenses totaled $1.2 million.
- Environmental Services Industry-A family-operated gas station hired a UST contractor to remove two underground storage tanks and associated contaminated soil. During the course of storage tank removal, the contractor’s backhoe hit a natural gas pipeline causing an explosion. Third parties filed bodily injury claims against the contractor, as well as the owner whose building was destroyed in the explosion. Claims exceeded $2.5 million.
- Environmental Services Industry-Hazardous Air Emissions-An environmental firm was operating an incinerator to burn hazardous waste at a remote site. Due to cold, inclement weather at the project site, a makeshift tent was constructed to enclose the incinerator, on-site equipment and office space. When a power failure caused the incinerator’s air pollution control equipment to shut off, a plume of hazardous air emissions entered the tent. Personnel from various on-site subcontractors were subsequently overcome with fumes and required medical attention. Settlement costs amounted to $635,000.
- Environmental Services Industry – An industrial cleaning contractor vacuumed contents of large storage tanks at a chemical plant. In the process of venting the tanks, the contractor inadvertently pumped toxic gas into the space. Several of the facility’s employees were overcome and died from the fumes. The contractors CGL policy declined the claim citing the pollution exclusion in the policy. Their CPL policy declined due to the Action Over exclusion.
While the coverages we offer are designed to address these general issues, we make no guarantee or warranty that any individual policy we offer will respond to all issues as described herein. Please refer to the actual policy wording in each offered form to determine coverage applicability and acceptability. In the event your client applies for coverage and we offer terms, please review those terms carefully to determine if all of your client’s exposures are being addressed. In some instances, more than one policy or type of coverage may be necessary.