USI’s Contractor’s Pollution Liability coverage can prevent underinsured losses of up to $2 million.
Operations

A manufacturing contractor was contracted to install a new heating, ventilation, and air conditioning system in a new commercial office building.

After three years, mold and mildew growth caused the release of airborne bacteria throughout the entire building, resulting in poor indoor air quality. Claims against the contractor for bodily injury and loss of property use exceeded $100,000. In addition, the contractor was responsible for decontaminating the HVAC system.

USI reviewed company operations to determine their pollution exposure. The contractor had only purchase CPL coverage when required by contract. We also recommended the purchase of a $1 million contractor’s pollution liability policy for company’s entire operations. As a result, $100,000 of the claims against the contractor were covered, as well $25,000 of additional decontamination costs.

Premises

An excavating and grading contractor was hired to prepare pads for a new housing development. The scope of work included rough grading to shape the site. It also included moving soil across the project site to make leveled pads for the new homes.

The contractor unknowingly spread petroleum-contaminated soil across a project site during fill operations for a housing project. The contractor was named in a lawsuit for exacerbating the extent of contamination. After lengthy deliberations, the contractor spent $250,000 in cleanup costs and defense.

Upon review of the contractor’s pollution liability policy, USI discovered the contractor was only carrying sudden and accidental pollution coverage via endorsement to their CGL policy. USI recommended purchasing a CPL policy for their operations with minimum limits of $1 million. As a result, the contractor’s cleanup and defense costs were completely covered.

Transportation

A street and road contractor was hired by the Department of Transportation to repave a 25-mile section of highway.

During the project, a subcontractor’s dump trucks accidentally backed into and ruptured a mobile refueling tank, releasing 300 gallons of diesel fuel onto the surface and into a nearby storm drain. The US Department of Transportation sued the contractor for costs to clean up the fuel spill, which were in excess of $75,000.

USI had secured a CPL policy for the contractor which included vicarious liability for actions of their subcontractors. Contractor’s CPL carrier provided defense and successfully tendered the claim to the subcontractor for the costs of the claim. As a result, the contractor avoided $75,000 of the subcontractor’s claim, plus an additional $60,000 in defense costs recovered through subrogation.

  • Enables contactors to comply with contractual requirements before performing work at the job site
  • Owners can purchase such coverage for contractors to ensure sufficient coverage
  • Can be written as a wrap-up, insuring all contractors working at specific job sites

Many contractors fail to understand the significance of the pollution exclusion on a general liability policy, and some contractors only obtain pollution liability coverage if the written contract specifications from the owner (or general contractor) require it.

Given the CGL pollution exclusion and the rise in environmental awareness over the last decade, contractor pollution liability requirements have been included in many construction contracts.

Time-element coverage only provides limited coverage for sudden and accidental events and does not address claims that are gradual in nature arising from contracting operations performed by or on behalf of a contractor.

USI will assess your pollution liability exposures based on the scope of work and contracts being considered.

We then negotiate with carriers for an appropriate contractor’s pollution liability policy based on our analysis. Finally, we continue to monitor scope of work and types of contracts contemplated and modify/enhance the policy to provide additional coverage when needed.