Preparing for Pollution Claims

Construction, industrial and real estate sectors need specific policies, say XL panellists.

Pollution insurance can mitigate the risks associated with industries such as construction, agriculture, energy and manufacturing. But without the proper coverage, an organization may still face a large bill to clean up environmental disasters.

Proper coverage is crucial in such industries, according to industry experts, who clarified where companies can bridge gaps during a recent webinar.

Two forms of coverage can mitigate risks, said Bob Hallenback, senior vice president, business development, and Tricia Norquist, senior vice president, West regional manager, at XL. Contractors Pollution Legal Liability (CPL) can offer those in construction full coverage for pollution claims that occur at a job site. For the same market, Contractors Professional and Pollution Liability protects against possible third-party bodily injury claims and remediation costs for pollution, such as contaminated soil or site-related toxic fumes.

Consider all pollution risks

Coverage should protect against all the possible site pollution risks. Hallenback and Norquist suggest a “cradle to grave” policy that covers a construction company for their entire project, both on and off the job site–ranging pollution in maintenance yards, fabrication shops and disposal exposures. It also allows for emergency remediation in the event of pollution, helping a company save both money and its reputation.

For example: if an overturned vehicle overturns and spills fuel into a nearby stream, the cleanup and restoration process is covered. If homeowners nearby make third-party property claims, the policy also covers those.

Industrial risks

Other forms of coverage, such as Pollution and Remediation Liability Coverage, is designed for commercial and industrial facilities, like the energy and petroleum industry. It covers new and historic pollution, restoration and natural resource damage. In the case of British Petroleum’s oil spill in the Gulf of Mexico, PARL would cover the damage to natural resources and make sure they are returned to their original state.

One sector–real estate–often overlooks pollution coverage. Developers, investors, real estate investment trusts, financial institutions pension funds and retailers should have coverage, the panellists said. Real estate insurance can cover pollution found after a thorough exam and remediation, such as cleaning up brownfields–contaminated soil–legal liability and real estate lenders’ policies.

However, the best protection against any of these risks is to be proactive, the two panellists noted. All industries should have a risk manager asses the risks of any project and make sure their policy for a job site covers all the possible risks.

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