Insurance Market Source regularly taps into its network of experts for insight into key trends and developments across the insurance landscape. Gina Jones, Associate Vice President and Director, Environmental Center of Excellence, Burns & Wilcox, breaks down the ins and outs of Contractor Pollution Liability insurance.
Q: What do Contractor Pollution Liability policies cover?
A: Contractor Pollution Liability policies cover a wide range of pollution risks at construction sites – from plumbing and roofing projects, to large-scale infrastructure and utility ventures.
On a job site, pollution risks are always a factor and nearly every client faces an environmental exposure. The risk is amplified because clients often unknowingly carry an uninsured peril. These policies help protect contractors against an extensive range of risks, including hazardous materials.
Brokers often overlook the importance of adding a Contractor Pollution Liability policy to their client’s portfolio, even though it is one of the best ways to protect a client from a lawsuit. Even an independent painting contractor could face a lawsuit due to something as simple as poor ventilation. It is better to put the protection in place from the beginning rather than take the risk of being uninsured.
Q: How can Contractor Pollution Liability policies be adapted to meet the diverse needs of clients?
A: It is important for brokers and agents to emphasize that Contractor Pollution Liability policies can accommodate clients’ special needs and circumstances. Policies are designed to respond to pollutants, which are generally defined as any substance introduced into the environment that has unintended or adverse effects. When the policies were first developed, they did not include some high-risk substances like mold because it is naturally occurring. Now, policies are flexible and can incorporate a large variety of potential pollutants to help ensure clients are fully protected.
Q: What are some key considerations for selling a Contractor Pollution Liability policy to a client?
A: Brokers and agents need to inform their clients that absence of loss does not mean absence of risk. Nearly every construction client faces an environmental risk, and on average, less than 10 percent of clients with environmental exposures seek out coverage, amounting to $1 billion in annual losses industry wide.
Additionally, Contractor Pollution Liability policies are more cost-effective and comprehensive than ever before. The costs of a contamination could be catastrophic for a business. It is important that brokers and agents help their clients weigh the costs.