You have General Liability insurance to protect your construction firm against third-party bodily injury and property damage claims. Unfortunately, General Liability policies typically exclude coverage for pollution-related hazards potentially leaving you exposed to uninsured claims.
Consider the following pollution-related claim scenarios illustrating why Contractor’s Pollution Liability (CPL) insurance is so critical to protecting your business:
- The windows a contractor installed in a new home build were not properly installed, resulting in water intrusion. Moisture built up in the walls over time, which led to significant mold growth. The homeowners began experiencing health issues due to the mold and filed a claim against the contractor.
- During a new home construction project, a plumbing contractor improperly installed the sewer lines, leading to a sewage backup into the basement after a few months of occupancy. The sewage caused significant contamination, leading to a major cleanup operation and health concerns for the residents.
- A contractor hired to renovate an older home had to remove lead-based paint. The contractor did not follow the correct lead abatement procedures, which spread lead dust throughout the home. The family alleged lead poisoning and filed a lawsuit.
- A residential contractor performing a home remodel hired a subcontractor to transport construction wastes including asbestos materials, lead paint chips, and solvents. During transit, the subcontractor accidentally spilled some waste on the road, leading to a required cleanup and regulatory fines. Both the subcontractor and residential contractor were held responsible for the cleanup costs and penalties.
- A commercial contractor installing utilities for a new commercial development inadvertently punctured an underground fuel oil pipeline. The fuel oil leaked into the soil, contaminating the local groundwater and impacting nearby businesses and residential areas. The contamination required an extensive cleanup operation and regulatory oversight.
In each case, a Contractor’s Pollution Liability policy is required to help pay for covered losses.
Contractor’s Pollution Liability insurance covers third-party bodily injury, property damage, and cleanup arising from pollution conditions caused by a contractor’s operations. The policy also covers the legal defense a contractor incurs in defending against pollution-related claims or regulatory actions.
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*NOTE: The insuring agreement in a policy sets out the covered perils, assumed risks, and nature of coverage that the insurance company provides to its insured in exchange for the premiums paid. Thus, the terms and conditions of the policy will dictate whether coverage exists and the nature of any potential benefits.