Why Do All Types of Contractors Need Contractor Pollution Liability?
Environmental claims can happen to any contractor.
Contractors often assume that claims arising from operations are covered by their general liability policy. Most commercial general liability policies have total pollution exclusions which means contractors are bare in the event of an alleged environmental claim. The Contractor Pollution Liability Policy (CPL) provides third-party coverage for bodily injury, property damage, cleanup, and related defense costs for pollution events.
The following examples are a sampling of the types of claims that could happen to a non-environmental contractor and have a devastating effect on their businesses.
For more information on how to protect your business from potential economic disaster, contact a Hertvik Insurance Group representative at (800) 467-3254 or visit our website at www.hertvik.com.
Concrete Contractor – A concrete contractor laid an undercoat of slag while creating a new runway for a large international airport in the Midwest. After the runway was completed, it was discovered that the slag was contaminated and was leaching pollutants into a tributary of one of the Great Lakes. The claim exceeded $400,000.
HVAC Contractor – An HVAC system was installed in a new office building. Within weeks after opening, the building had to close due to occupants being overcome with breathing problems and headaches. The contactor was one of many parties sued. During discovery, it was determined that the HVAC system was installed exactly as the specs described. However, the contractors had to absorb over $250,000 in uncovered defense expenses because he had no environmental coverage and as a result, no indemnity was available for defense costs incurred.
Paving Contractor – After laying the “tack” coat of Naphtha in preparation for the final coat of blacktop on a new road job, a heavy rain hit, washing the toxic material into a drainage ditch along the road and, subsequently, into a stream. The clean-up of this claim cost over $150,000.
Mechanical Contractor – A contractor was called to a site where an underground storage tank was being removed. He was contracted to loosen a heavy coupling for which the tank removal company did not have the adequate tools. Several days after leaving the site, having shaken the pesky coupling free, the contractor was notified that he was being sued for the tank leaking underground, spilling hundreds of gallons of gasoline into the soil. In the course of completing the job, the contractor dropped a heavy wrench down the intake spout of the fiberglass tank, cracking the bottom, and causing the leak. The total costs to defend the claim (he alleged that there was no way of knowing whether something else caused the leak) and pay damages exceeded $250,000.
Painting Contractor – While painting the interior of a nursing home, the contractor was sued by over a dozen residents alleging that fumes as a result of inadequate venting overcame them. Total claim was over $200,000.
Janitorial Contractor – While working at a mall, a cleaning company inadvertently mixed cleaners, one ammonia-based and the other chlorine based. The result was a toxic cloud of ammonia chloride that caused respiratory distress in dozens of shoppers. Total cost of this claim: $175,000.
Pipeline Contractor – A contractor incurred a large claim when he installed a new storm water drainage system for a municipality in Michigan. Not long after completion, a heavy rain struck the city, causing a backup of water with human waste into the basements of over 100 high-priced homes. The contractor was sued for installing an inadequate system and the environmental insurance carrier paid over $800,000.
Contractor Pollution Liability (CPL) policies are very affordable particularly for general and trade contractors. Contact a Hertvik Insurance Group representative at (800) 467-3254 for more details.