In this series we look at specific insurance policies and concisely explain how they work.

Contractors Pollution Liability

Who does it protect?

• The contractor who will be the first named insured on the policy.

What coverages does it offer?

• It covers the contractor from damages (defense and indemnity) arising out of third party bodily injury and property damage claims, as well as first party cleanup costs that the contractor is “legally obligated to pay.” Damages must arise out of a pollution condition, which is defined as the discharge, dispersal, seepage, migration, etc. of pollutants. Pollutants mean any solid, liquid, gaseous, thermal or biological irritant or contaminant like smoke, acids, chemicals or any matter that corrupts or is harmful to the soil, air, water, living things or environment.

Who could bring a claim?

• Any third party could bring a claim if they are alleging bodily injury or property damage arising out of a pollution incident that the first named insured is legally responsible for. First party claims can be brought by the first named insured, but the first named insured must be legally obligated to pay for damages (generally buy a regulatory agency like the EPA).

Why would they bring a claim?

• Claims would be brought if a third party felt that they suffered bodily injury or property damage as a result of the contractor’s operation which led to a pollution incident. Regulatory agencies can also require certain actions for those responsible for a pollution condition.

When should you submit a claim?

• The contractor should submit a claim to the insurance company in writing as soon as practicable. This submission should include the claim or suit, which (generally speaking) is an official demand for money or services.

What are some claims examples?

• Contractor accidently drilled through a small water pipe. Mold grew over the weekend. The contractor was responsible for third party bodily injury claims and cleanup costs
• Contractor was drilling through a wall and accidently released asbestos. Contractor was responsible for cleanup costs.

Any specifics to be aware of?

• Triggering these policies are very important. If you have any questions about a pollution condition at your property or site, please reach out to you broker.