Pollution is often viewed as something that happens to “other” companies – the ones who deal in hazardous materials and contaminants. The fact is, most businesses (and even most individuals) could become polluters.
Do You Need Pollution Insurance Coverage?
It isn’t just mining companies, construction sites or fertilizer companies that can cause pollution. Do you own a vehicle? The fuel in your tank could become a pollutant if spilled during an accident. Do you own a restaurant? Soot from your cooking equipment and even your cooking oils could be considered pollutants.
Just about every business can benefit from Pollution Insurance. Talk to Hayes Brokers to determine your risk.
Do You Already Have Pollution Coverage?
Pollution coverage is NOT covered under a Commercial General Liability policy. In fact, the coverage is excluded in TWO places on the policy.
The first is in the Exclusions section of the Commercial General Liability Coverage Form (CG 00 01). This exclusion is for pollution or pollution-related bodily injury, property damage and/or personal or advertising injury “ arising out of the actual, alleged or threatened discharge dispersal, seepage, migration, release or escape of ‘pollutants’”. Pollutants are defined later in the coverage form as “any solid, liquid, gaseous or thermal irritant or contaminant including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.”
The second is an endorsement from Insurance Services Office (ISO) called the Total Pollution Exclusion (CG 21 49). This endorsement indicates that there is no pollution coverage “at any time” and also excludes coverage for testing, monitoring, cleaning up and a host of other pollution-related expenses.
What Are the Types of Pollution Insurance Coverage?
Insurance companies recognize and insure for two types of pollution: long-term pollution and sudden & accidental.
Long-term pollution (or seepage and pollution) is defined as pollution that happens gradually over a long period of time, such as leaching out. Industries affected by long-term pollution can include gas stations, mining and factories.
Sudden & accidental pollution is defined as happening over a brief period of time or all at once. This can refer to anything from a sudden explosion to a breakdown of holding tanks or equipment.
How Can You Get Coverage?
The first line of defense is to read your insurance policy. Is there any mention of pollution coverage? Is it claims made or occurrence? What is the limit? Is it sudden & accidental coverage or long-term?
Finding the right coverage can be intimidating. To determine what Pollution Insurance coverage is right for your business, contact a Hayes broker to schedule a risk management review.