Environmental Insurance for Contractors: More Possibilities Than May Be Expected

Abstract

Pollution events are often thought of as uninsurable. A more realistic view is that loss or claim from a pollution incident is an insured event in many insurance standard property and liability policies. While coverage may be narrow and limits less than may be desired, it does exist. In this article we look at insurance policies typical of the construction industry to determine the extent of coverage for damages from an incident of pollution.

Acknowledgments

William K. Austin is a principal of Austin & Stanovich Risk Managers LLC, a national provider of risk management and insurance consulting services including litigation support and expert witness. Other details available at www.austinstanovich.com.

Notes

¹ISO property policies include business owners policies (BOP), commercial property forms (CP), builders risk, installation forms, and contractors equipment.

²ISO liability policies include commercial general liability (CGL), business automobile policy (BAP), owners and contractors protective (OCP), railroad protective liability (RPL), and umbrella.

³It is important to distinguish between use of “bodily injury” and “personal injury” in insurance policies. “Personal injury” is not considered “bodily injury.” The ISO commercial general liability policy CG 00 01 (12 07) defines “personal injury” as “injury, including consequential “bodily injury”, arising out of one or more of the following offenses: false arrest, detention or imprisonment; malicious prosecution; wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor; oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; oral or written publication, in any manner, of material that violates a person's right of privacy.”

⁴Specified causes of loss in all ISO property policies reviewed in this article means: fire; lightning; explosion, windstorm or hail; smoke; aircraft or vehicles; riot or civil commotion; vandalism; leakage from fire extinguishing equipment; sinkhole collapse; volcanic action; falling objects; weight of snow, ice or sleet; water damage.

⁵Insurers will often include coverage for AST exposures as well as UST.