Pollution Liability Insurance

There are a handful of different pollution liability insurance types, including: 

• Premises pollution liability coverage
• Contractors pollution liability coverage 
• Product pollution liability coverage
• Transportation pollution liability coverage
• Environmental impairment liability coverage

An example of a product pollution claim is when a company manufactures and distributes paint that, unknown to them, contains a harmful chemical. If this chemical leaches into the ground or water systems and causes environmental damage or health issues, affected parties could file a claim against the manufacturer for the pollution caused by their product.

The purpose of environmental insurance is to provide financial protection to businesses from the costs associated with damage caused by environmental accidents, such as pollution spills or the discovery of hazardous materials on a property. This insurance helps protect businesses from costly expenses, such as:

• Cleanup costs
• Third-party bodily injury
• Emergency response costs
• Legal fees
• Regulatory fines
• Property damage

In insurance, a pollutant is typically defined as any substance introduced into the environment that can harm human health or damage natural resources. This includes chemicals, waste materials, gases, heavy metals, pesticides, and other toxic substances.

While contractors are not required to carry pollution liability policies, having this type of insurance is crucial for comprehensive risk management. Standard commercial general liability policies exclude coverage for pollution-related incidents, leaving a significant coverage gap should a pollution incident occur during ongoing and completed projects.