Environmental liability insurance is a type of insurance that helps protect businesses and individuals from the financial damages that can result from environmental contamination or pollution. This type of insurance can help cover the costs of cleanup, legal fees and other expenses that may be associated with an environmental incident.
How familiar are you with these three basic environmental liability insurance forms?
Environmental impairment liability (sold under various product names). This type of coverage, for property owners, applies only to listed locations. This policy form can provide coverage for first-party cleanup costs, business interruption, loss of rent and extra expenses coverage. These coverage extensions are especially important on habitable commercial buildings such as apartment complexes and hotels.
During the insurance application process, underwriters need to know about any pre-existing pollution conditions at the insured locations, the raw materials or inventories housed there and the size and use of the insured property.
Contractors environmental liability: This coverage, designed for contractors, applies to pollution events arising from insured operations as described in the insurance application. In some cases, the insurance application specifically becomes part of the insurance policy.
During the insurance application process, underwriters will need a description of insured operations and a measurement of relative size of the operations to be insured, usually measured by dollars of gross revenue.
Professional liability: In most cases, professional liability coverage for pollution-related losses is provided under a professional liability policy that does not have a pollution exclusion. The insurance application process mirrors traditional professional liability underwriting, with an emphasis on the professional qualifications of the insured.
Environmental liability insurance policies can be tailored to fit the specific needs of your business or organization and can cover a wide range of risks, including those that may arise from activities such as manufacturing, transportation, storage and disposal of hazardous materials. By understanding what each of these covers, you can make sure that you’re protected in the event of an environmental incident. Whether it’s a spill at your business or damage to a property you own, this insurance can give you the peace of mind knowing that you’re covered.
C&S’s Environmental Package offers Commercial General Liability and Contractor’s Pollution Liability for environmental contractors, Commercial General Liability and Professional Liability for environmental consultants, and monoline Contractor’s Pollution Liability for non-environmental contractors.