Pollution liability insurance is also called environmental liability insurance, and while you may think it is only for industries like energy, mining, power and manufacturing, this type of coverage is needed in many different types of businesses and industries. What is seen as a safe practice today may have long-lasting consequences which can lead many years later to the downfall of a business many years later. Pollution/environmental liability insurance is designed to protect your business both now and in the future.
How does it work? – Traditional business liability insurance policies do not provide coverage for pollution and other environmental issues. Therefore it is important to have environmental insurance that is designed for the specific needs of your business. Some of the coverage types which can be part of your overall risk management include pollution liability, environmental professional liability, contractors’ liability, transporter insurance and storage tank pollution liability. Environmental impairment liability insurance is often used in the sale or investment of a business to assure potential purchasers or investors that unknown conditions won’t present an issue in the future. With proper protection, your business can be protected against environmental claims, cleanup costs, and claims of bodily injury or property damage.
This type of coverage is designed to help control the risk of liability in two ways:
- First-party coverage: provides coverage for things like a spill or contamination that needs immediate cleanup. For example, if there was an accidental chemical leak at your manufacturing facility, first-party pollution liability insurance could provide the funds for the cost of the cleanup and remediation.
- Third-party coverage: is designed to protect businesses from the actual release of pollutants from a facility which could adversely affect others. For example, if there was a leak at your plant and toxins were released into the air in the surrounding community requiring residents to evacuate, your third-party coverage could provide the necessary funds to pay the resulting costs and damages from lawsuits. Third-party pollution insurance coverage could also provide protection if your product causes pollution while being transported by a third party, such as a trucking company or railroad.
What businesses can benefit from this type of coverage?
You might be surprised by the types of businesses that purchase this type of coverage. Obviously manufacturing companies which manufacture or use those toxic substances will benefit, but commercial property owners and developers, local governments and even amusement parks can also benefit greatly by having this type of insurance protection.
Some types of businesses which have this coverage include:
- General contractors
- Hospitals and healthcare facilities
- Landfills, disposal and recycling facilities
- Remediation firms
In addition, any business that stores toxic substances in above- or below-ground storage tanks should consider this coverage.
We have helped countless businesses protect their interests with environmental insurance protection. Our highly dedicated and experienced staff will help you evaluate your risks and propose different risk management strategies. Contact us today for more information.