News

If you think that your insured is free of any pollution or environmental exposure, you may want to think again. Failure to offer pollution coverage can jeopardize your agency’s financial health by creating a serious (and easily avoidable) E&O exposure. Additionally, it results in lost opportunities to generate additional income from existing accounts. If you write any of these types of accounts and are not offering pollution coverage, then you’re missing out:

Contractors: All contractors have a pollution exposure. Some of the largest losses can come from risks that are not classified as environmental contractors. Serious pollution losses can arise as a result of digging, moving or operating equipment, disturbing lead paint or asbestos, or any other construction activity. They can also happen as result of a fire, explosion, storm, vandalism, etc. You should be offering Contractors Pollution Liability (CPL) to all of your contractor risks. CPL can provide Bodily Injury, Property Damage, and Cleanup coverage for unintentional pollution caused by covered operations while the insured is working at sites not owned or operated by the insured. CPL policies can be written either on an occurrence or a claims made form, depending on the exposures. Annual and job specific policies are usually available.

Property Owners/Leaseholders: Any insured that owns or rents property has a pollution exposure. This can arise as a result of “midnight dumping” by a third party or simply as a result of corrosion, fire, explosion, or any other accident. To address this exposure you should be offering your clients Site Specific Pollution Liability (SSPL). SSPL can provide both first-party cleanup costs as well as third-party BI, PD, and cleanup costs. SSPL provides coverage for unintentional pollution arising from a designated premises that is owned or occupied by the named insured. SSPL is always written on a claims made basis.

Vehicle Owners: Any trucker, manufacturer, distributor, or contractor can be faced with a serious pollution loss after a collision or overturn. If you think that only vehicles carrying materials labeled as hazardous are at risk of being involved in a pollution loss then you would be mistaken. Cargo as ordinary as milk, animal feed, asphalt, or dirt can cause a pollution loss in the event of a spill. Vehicle owners can apply for Motor Vehicle Pollution Liability (MVPL). MVPL responds to claims of accidental pollution emanating from cargo carried on a scheduled vehicle. MVPL is typically written on an occurrence form.

Mold Related Risks: Depending on risk specifics, mold coverage may be included or excluded from pollution policies. Mold coverage opportunities are generally broken down into three main categories:

• Mold Remediation Contractors and Consultants
• Contractors Pollution Liability For Construction Contractors
• Site Specific Pollution Liability (sometimes referred to as Environmental Impairment Liability or Pollution Legal Liability)

Don’t overlook property managers. Do the owners of the properties that they manage carry SSPL? Do the trade contractors (carpet cleaners, painters, roofers, plumbers, HVAC, etc.) that they hire to service the properties carry CPL? While it may not be feasible to mandate that the property owner carry SSPL, a good risk management practice would be to require all contractors to carry CPL and to name the property manager as Additional Insured.

Tuscano Agency has highly competitive pollution products available for both environmental and non-environmental risks. Pollution coverage requires specialized applications, which are available for download from our website.