Pollution liability insurance, which guards against liability from damage caused by hazardous waste materials, is one of the types of business insurance that independent contractors may require. Independent contractors need to defend themselves from any claims of injury sustained while performing their jobs. Pollution liability insurance protects companies that produce hazardous waste and release it into the environment, including those in the oil and agribusiness industries, construction, excavation, waste depositories, and asbestos abatement contractors. Policies cover claims for property damage, bodily injury, and clean-up expenses resulting from contamination by toxic waste. Hazardous waste materials released during business operations can result in claims from third parties for bodily harm and property damage. Pollution liability insurance policies cover these claims. This insurance covers both your completed operations and you while you are working on a project. In other words, you are shielded from liability concerns if there is a problem with hazardous waste materials after completing the job.
Main Points
- Insurance against pollution liability guards against liability for harm brought on by hazardous waste.
- Because standard commercial general liability policies do not cover pollution liability, pollution liability insurance is required.
- Owners of industrial sites and business owners who may be exposed to hazardous waste should consider purchasing pollution liability insurance.
The Need for Coverage
Prior to the middle of the 1980s, typical commercial general liability policies covered pollution liability. However, insurance providers started to exclude pollution liability under the general liability policy, necessitating the purchase of separate pollution liability insurance. If you work as an independent contractor, you will discover that many jobs demand that you have pollution liability insurance. You will be required to present documentation of coverage prior to starting a job. Projects to clean up the environment can cost millions of dollars. In the event that a clean-up becomes necessary, this insurance will safeguard your financial interests. If a third party is harmed by a toxic substance produced due to your work, pollution liability insurance will protect your interests against lawsuits.Who Needs Protection
The need for pollution liability insurance is obvious for businesses whose operations involve exposure to hazardous waste, such as asbestos abatement or waste depository. Pollution liability insurance may still be a useful form of protection if you are the owner of an industrial facility that does not handle hazardous waste. Before purchasing the property, any inspection you had done on it might have missed some hidden hazardous waste that could be found years later, potentially holding you accountable. Because environmental laws are constantly changing, you don't want to be caught without the appropriate liability protection.Pollution liability insurance is available where?
Pollution liability coverage is offered by the majority of companies that sell contractor insurance. The cost of the coverage varies depending on the amount of coverage required, your deductible, and whether it is bought as a standalone policy or in conjunction with another commercial policy. Several businesses provide pollution liability insurance for contractors, including: Chubb: Chubb provides two different insurance policies: Contractors Pollution Liability (CPL) and Contractors Pollution Liability (CPL) / Errors & Omissions (E&O). Programs for accounts with small businesses can be customized. The minimum premium ranges from $1,500 to $5,000, and there is a $5,000 minimum self-insured retention. Travelers: Travelers offers professional practice insurance for environmental consultants and contractors. To protect against liability risks and provide coverage for pollution liability errors and omissions (E&O), the policy combines professional liability and pollution liability. AIG: The Contractors Pollution Liability (CPL) policy from AIG is made to address the risks associated with contractors that aren't covered by the typical general liability insurance policy. This coverage can be written either generally or for a specific project, and it includes coverage for pollution and product liability. Coverage is offered to all construction and commercial services contractors for a minimum premium of $2,500 and available limits of up to $75 million.Final Thoughts
Business owners and independent contractors must ensure that a business owner's policy adequately protects their financial interests. It is a good idea to speak with an insurance professional about your need for pollution liability insurance if you believe there may be a risk of exposure to hazardous waste in your company's operations. It is too late to purchase coverage to cover your liability risk if an accident occurs on the job site or during one of your finished operations. Keep in mind that a general liability policy does not provide coverage for pollution liability. In the end, it's up to you to make the final decision. Obtain sufficient information to enable you to decide on the need for pollution liability insurance.