What is Contractors Pollution Insurance?

By Burbank Insurance

Most contractors don’t think they need Contractors Pollution Insurance for their business, or they overlook it. They might think that unless they are dumping toxic waste into a river or spewing gross gases into the air, pollution insurance isn’t needed. We all picture major oil spills when we think of pollution.

Let’s take the example of a painting company. Here are some reasons why pollution insurance makes sense for all contractors that work with construction materials.

First, let’s define what is considered a “pollutant.” A pollutant is defined as “the discharge, dispersal, release or escape of any solid, liquid, gaseous or thermal irritant or contaminant, including, but not limited to, smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, medical waste and waste materials into or upon land, or any structure on land, the atmosphere or any watercourse or body of water, including groundwater, provided such conditions are not naturally present in the environment in the amounts or concentrations discovered.” 

It means any solid, liquid, gas or other irritating substance released into the land, air or water that isn’t naturally supposed to be there. It’s very common for painters and every construction trade to encounter these types of pollutants on job sites.

So what exactly does contractors pollution liability (CPL) insurance cover? “CPL is a contractor-based policy, offered on a claims-made or occurrence basis, that provides third-party coverage for bodily injury, property damage, defense, and cleanup as a result of pollution conditions (sudden/accidental and gradual) arising from contracting operations performed by or on behalf of the contractor.” Source link below.

Here are a couple of examples of painters getting hit with massive pollution claims because of unexpected situations:

  • A nursing home sued a painter for $200,000, claiming residents got sick from improper ventilation of paint fumes.
  • A painter scraping lead paint off a bridge accidentally let paint chips fall into the river below, racking up over $500,000 in damages.

You could face claims from things like rain runoff after painting, accidentally hitting a water pipe and causing mold, or a vehicle accident where paint spills contaminate the environment. Most businesses don’t think pollution risks apply to them since they have no plans to release pollutants. But it only takes one claim to devastate your company with legal fees, cleanup costs, medical bills, and reputational damage.

Many contractors think their general liability policy has them covered for third-party claims, but those policies usually exclude any pollution-related bodily injury or property damage. They also don’t pay for environmental cleanup from a pollution release. These costs can add up very quickly. The contractors pollution liability insurance product is designed to fill that gap.

The risks to your painting business from pollution incidents are real. Now that you understand the dangers, protect your company with contractors pollution liability insurance from Burbank Insurance. We’ll ensure you have the right coverage to safeguard your business’s future.

To sum it up, Contractors Pollution Liability Insurance (CPL) is a type of insurance policy specifically designed to protect contractors, including painting contractors, from third-party claims related to pollution incidents caused by their work.

Some key things to know about Contractors Pollution Liability Insurance:

  • It provides coverage for bodily injury, property damage, defense costs, and cleanup costs resulting from pollution conditions arising from the contractor’s operations.
  • It covers both sudden/accidental pollution incidents as well as gradual pollution events.
  • Pollution conditions covered can include release of substances like mold, asbestos, fumes, bacteria, chemicals, etc.
  • It protects against claims from third-parties alleging injury or damage due to the pollution incident caused by the contractor.
  • Coverage can be written on a claims-made basis or an occurrence basis.
  • Claims examples could include faulty ventilation leading to fume exposure, disturbance of lead paint, accidental spills that contaminate soil/water, mold growth from water leaks caused by the contractor’s work, and more.

In conclusion, CPL insurance fills a gap in most general liability policies by providing specialized coverage for pollution-related liabilities that contractors can face due to the nature of their operations and materials used. It helps transfer the risk of costly pollution claims to the insurance company.

This article uses examples from here, by ranchomesa.com.

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