Construction projects and their environmental exposures are more complex than ever. All too many contractors gamble with their bottom lines – ignoring environmental exposures because claims are not frequent. But here’s the kicker – while these incidents may not happen frequently, they are very expensive. Cleanup and remediation can quickly eat up profits.
Even if you’re not directly involved in environmental remediation, you could easily be exposed to liability for damages caused by substances you bring onto the jobsite. And contaminants already on site could create even costlier headaches. In addition, some of your subcontractors may have environmental exposures directly related to the nature of their work. For example, what happens if a subcontracted excavator strikes an underground tank or fuel line?
The last thing you need is a messy pollution claim, a visit from the Environmental Protection Agency, a hefty fine, and costly project delays. With multimillion dollar settlements being more the norm than the exception in environmental lawsuits, being caught unprotected isn’t a gamble you want to take.
How to stack the pollution deck in your favor:
1. Know your risks: Carefully review Phase I Environmental Site Assessment reports and other information sources about the site. Consider all potential exposures, inside and out. Indoor hazards can include asbestos, lead, mercury, PCBs, and mold. Outdoor hazards can include preexisting site contamination such as underground storage tanks, utility lines, buried wastes, contaminated soil, asbestos, or lead paint.
2. Weigh your options: You may decide to redesign the project, price the project differently, better manage the exposures through written programs and employee training, or even avoid the project altogether. Identifying your exposures puts you in the driver’s seat for managing these risks instead of in a reactive position.
3. Get the right New York construction insurance: Standard CGL policies contain an “absolute pollution exclusion,” although they usually provide limited pollution coverage. Even if yours provides limited coverage, it likely doesn’t cover the cost of cleanup, the biggest cost in a pollution claim. And for contractors, CGL policies are increasingly written with a “total pollution exclusion” endorsement, effectively removing any coverage for pollution damages. That leaves a big coverage gap.
Contractors Pollution Liability insurance is designed to fill that gap. It provides coverage for third-party claims for bodily injury and/or property damage, and for remediation costs for pollution incidents resulting from the contractor’s operations. Here are a few highlights of this coverage:
- Policies are usually written to provide coverage for operations performed “by or on behalf” of the insured.
- Coverage is provided for the insured's operations away from their own premises.
- Base policies can be written on either a claims made or an occurrence basis.
- Mold coverage is usually offered as an endorsement and may have a sublimit of liability and its own deductible.
- Options include coverage for over-the-road transportation operations, temporary storage of contaminants, and loading and unloading operations.
Don’t gamble with your construction profits. Let the experts at BNC Insurance and Risk Advisors create a custom New York construction insurance program that protects your entire project – and your profits – against pollution risks. Want more construction insurance and risk management updates?
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