The pollution exposures impacting your contracting work in the field are well documented, but have you considered the pollution risks impacting your owned, rented or leased operating locations?
Many contractors have physical locations that support their work in the field, which can include offices, storage buildings, equipment/vehicle maintenance facilities, fuel storage, outdoor storage yards, raw materials, etc.
Depending on the activities taking place at your operating facility(s), environmental exposures impacting your location(s) can include, but are not limited to;
- Storage of bulk materials such as adhesives, stains, fuel, etc. which can be hazardous in the event of severe weather, fire, or faulty work.
- Vapor intrusion from 3rd party properties migrating onto yours
- Storm water run-off from machinery and/or materials stored outdoors on the property, & employee parking lots.
- Underground ground & above ground storage tanks, totes, barrels, drums, etc.
- Unknown contamination from historical property uses
- Storage of waste oils, anti-freeze, batteries, hydraulic fluid, PFAS chemicals, etc.
- Illegal dumping of waste by 3rd parties (midnight dumping)
- Vandalism creating a pollution liability
- Pollutants from neighboring properties migrating onto your property
- Mold, asbestos, silica, lead, etc.
- Impacting underground utilities
- Nuisance odors from batch plants, idling equipment, etc.
- Loading and unloading products/materials over unsealed or cracked surfaces
- Devaluation of property value due to a buyer’s uncertainty concerning possible present contamination
Environmental Loss Examples
- While moving a large piece of equipment at a contractor’s storage facility, the forklift operator hit an aboveground storage tank releasing 10,000 gallons onto the ground that migrated onto neighboring properties before emergency response crews could respond. Area businesses and residents were evacuated. Claims for bodily injury, cleanup, property damage… exceeded $400,000.
- During the night an unknown party illegally placed drums of hazardous liquid into a dumpster at a drilling contractor’s equipment storage facility. The containers were not leaking, but the cost to properly dispose of the hazardous liquid cost the drilling contractor roughly $50,000.
- A trucking contractor’s vehicle wash bay experienced a release from the piping system, causing a substantial amount of cleaning solvents to enter the surrounding soil and ground water. Cost to remediate the cleaning solvents from the soil and ground water was in excess of $250,000.
- A construction management company was remodeling and expanding their home office. During the project, the excavation contractor hired to prepare the site for the expansion excavated through and ruptured an unmarked gas line. The excavation contractor was liable for cleanup costs and business interruption expenses, which totaled over $300,000. Due to the size of the loss, the excavation contractor was forced out of business, leaving the construction management company (property owner) to cover the costs.
- A HVAC contractor was hired to upgrade the heating system at a construction management company’s office. While working in the building, the HVAC contractor failed to vent the system properly, causing a release of carbon monoxide. Employees at the office began complaining of headaches and nausea, and were rushed to the local hospital. As a result, several bodily injury suits were filed against the construction management company (property owner of the office building) in excess of $1,000,000.
- The concrete secondary containment of a 10,000-gallon aboveground diesel storage tank located at a contractor’s office/storage facility cracked. The release from the tank spilled 8,000 gallons into the containment area of the tank. Over the weekend diesel fuel seeped into the underlying soils. Total cost for investigation, removal, and disposal exceeded $320,000.
- A contractor routinely stored barrels of fuel, oil, anti-freeze, paint thinners, and other solvents at their outdoor storage yard. While loading about 1,000 pounds of potentially hazardous products onto a truck, five barrels slipped off the fork lift releasing the contents. Fortunately, the contracting company had an emergency response plan in place and their emergency response team was able to contain most of the contaminants. Cost of the additional cleanup was $70,000.
Insurance Product Solution
Environmental Impairment Liability (EIL)
Sometimes referred to as Pollution Legal Liability, EIL is for contractors that own, rent, lease, or occupy a property, which is susceptible to economic loss caused by pollution that actually, or allegedly originated from their location, or migrates onto their location from a neighboring property.
EIL Policies Can Provide Coverage for
- New pollution conditions and/or unknown preexisting conditions
- Third party bodily injury & property damage
- on and off site clean-up costs
- 3rd and/or 1st party business interruption
- Legal defense expenses
- Above ground storage tanks
- Non-Owned Disposal Site Liability
- Transportation Pollution Liability
- Can be included with Contractors Pollution Liability on a package policy
- Blanket coverage for insureds with multiple locations
Policy Terms, Limits, & Premiums
- Minimum premiums start at roughly $2,000 for $1M/$1M limits
- $5,000 minimum deductible
- Up to $25M in limits available, higher with towers
- Multi-year terms available up to 10-years